Despite the sexy and provocative, intriguing adverts, I found American Apparel a great company to write about due to their individuality and innovative ways of doing business.
While studying in Fashion Buying and analyzing these retailers on the high street in UK, I realized a pattern. They are all customer-driven, studying the same fashion trends of the season and marketing to the same fashion followers. All companies strive for competitive advantage over the others by differentiating themselves...but are they really different? Or are they not all doing the exact. same. thing.
Then you have American Apparel. The controversial, "cocaine-chic" (whatever the hell critics even mean) fashion brand focusing on serving their consumers quality and style while maintaining a sense of ethicality opposed to trying to copy what Tom Ford is doing. Dov Charney, CEO of the US bred company, created a whimsical concept of supplying consumers while hitting points some companies find challenging such as volume, volatility, value, and of course, variety.
Giving you a Turtle neck body suit made out of polyester and elastane in six different colors, American Apparel knows what their 24 year old and 32 year old customers want and need. I, personally, have had experiences where I would be looking for something specific (For example, patent leather Emerald green oxford shoes). In the end, I always knew after my search through four different retailers, American Apparel would have exactly what I needed and more.
The issue with my above statement plays into the profitability issues American Apparel is currently facing:
Q: If I know American Apparel has what I'm looking for, why is it always my last resort?
A: Because they're trying to charge me $48 US Dollars for some black Spandex pants!
If you go to the About Us section on American Apparel site, they discuss their familial bond amongst their employees, their strong sense of ethical awareness and sustainable practices, vertical integration, lack of outsourcing to other poor countries, and some other 'Kumbayah' factors that play into me paying 55 bones for a simple cropped gray sweater.
Now I find it absolutely fascinating the company practices sustainability. I believe it is rather beautiful. The recycling of scraps for reusable fabrics, the use of organic cotton, low impact dye all make my heart warm. The idea of the company being sweatshop free is almost unbelievable. Treating your employers with respect, no exploitation, amazing salaries and benefits for garment makers all send chills down my spine.
However, American Apparel needs to refocus its time on the core of its business; its structure. Literally in Quarter 2 of 2013, according to Just-Style, the company suffered a $19million loss! The company's constantly boasting on their vertical integration, having the flexibility and efficient responsiveness to customers, and them being "Earth friendly" but they aren't gaining any profit from it!
Although sales are rising (by like 1 dollar every bill), they are still in serious debt. You spend all this money for your reputation (might I add is still being attacked for the semi naked 15 year old girls straddling men in your adverts) and you clearly can't afford it! You're giving things with nothing to give!
Maybe they should reconstruct their strategic plan by focusing on cost advantage. They produce high in volume with all those bodycons in 15 damn colors, they should be able to readjust. Then again, sourcing in the US is pretty damn expensive and someone has to pay for it... They could try to do some outsourcing to countries like Morocco or Tunisia to save money on sourcing in the states. Then again, they'll have to factor in lead times and freight charges...
I feel terrible I don't have a solution right now and I'm starting to be paradoxical myself. But I'm still learning. I thought it was just best to talk it all out of my system.
If you made it to the end, thanks for reading.