August 23, 2010

American Apparel Going Bankrupt?

Even after the recession a lot of designer brands are still suffering. According to Wall Street Journal, American Apparel warned last Tuesday that it may not be in business much longer due to decline in sales and mounting debt.

On the American Stock Exchange, American Apparel fell to an all time low of $1.03. The company has $120.3 million dollars in debt as of June of this year. As Wall Street Journal reported:

In preliminary results for the quarter ended June 30, American Apparel said it expects a loss of $5 million to $7 million, compared with a profit of $7.3 million a year earlier. Sales are expected to total $132 million to $134 million, down slightly from $136.1 million a year earlier.

One can not disagree that American Apparel was a marketing genius as they aimed towards a niche- hipsters with way too much money. American Apparel jack up the price of simple cotton wear for their scandalous ads (with models that look like everyday girls like you!) that look like some amateur porn that was shot in some dude's mother’s basement. Not that I’m at all sexiest. I don’t mind seeing boobs and butt as long as it’s tastefully done... but the majority of their ads just reek homemade porn taken with a point and shoot camera.

American Apparel’s CEO Dov Charney is not exactly a clean guy either. Dov has had his share of sexual harassment lawsuits on hand. A while back, one of Amercan Apparel’s employees sued Dov as he demanded that she pretend to masturbate for him. Dov also once told a reporter that he is more than happy to do an interview but only while he is masturbating. According to MsnBC, Dov has been open about the fact that he had sexual encounters with his employees and according to BusinessWeek, there as been a few claims from internal employees that some seniors in the company received sex from less senior employees in exchange for a promotion. By the way, Dov also posed nakkid for his own racy ad. May I say… How awkward is that to see your CEO’s peen?!

Dov Charney, CEO of American Apparel

I’m not surprised that people are finally losing interest in American Apparel. Their stuff isn’t exactly the best quality and I’m not about to pay $20 for a cotton no logo or design shirt or $40 for a cotton dress when I can buy the same thing at Zellers or Walmart for $10. So the news that they’re going under doesn’t really influence me as I'm not a frequent buyer anyways.

What do you think about American Apparel?