American Apparel

American Apparel (AMEX: APP) is the largest clothing manufacturer in the United States.[3] It is a vertically-integrated clothing manufacturer, wholesaler, and retailer that also performs its own design, advertising, and marketing. It is best-known for making basic cotton knitwear such as t-shirts and underwear, but in recent years has expanded to include tank tops, vintage clothing, dresses, pants, denim and accessories for men, women, children, babies and dogs. The company is known for a number of progressive policies including promoting immigrant rights and labor policies the company dubs “sweatshop free.”

In 1997, company founder and CEO Dov Charney, who had run several related clothing enterprises, transitioned his manufacturing to Los Angeles and began to sub-contract sewing with Sam Lim who, at the time, had a shop with 50 workers under the Interstate 10 freeway in Los Angeles. Months later the two became partners.[5] In 2000 American Apparel moved into its current factory in downtown Los Angeles. The company also operates a dye house and knitting facility located in Los Angeles.[6]

flashing light shoesAfter its success as a wholesale brand, the company moved into the retail market. The company was ranked 308th in Inc. Magazine’s 2005 list of the 500 fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over US$ 211 million.[7]

In late 2006 American Apparel announced a reverse merger, in which Endeavor Acquisition Corp., a special purpose acquisition company founded in July 2005, bought the company for $360 million.[8][9] The merger closed in December 2007, at which point American Apparel became a publicly traded company.[10] As a result, Charney became the President and Chief Executive Officer of the publicly traded company known as American Apparel, Inc. He remained the majority shareholder, and all employees of American Apparel were given 500 shares of stock in the new company.

future nike shoxAmerican Apparel retail stores are marketed and designed individually rather than homogeneously.[18] Store designs are sparse and typically cost between $100,000 and $400,000 to develop.[18] The company tends to reject midtown, high rent locations and generally avoids in-mall stores.[18] The stores are often hubs for urban renewal since the company looks for low-rent but high traffic locations like Houston, Little Tokyo, New Orleans, college towns and most recently across from the Apollo Theater on 125th in Harlem.[19][18] In some stores, the decor features Penthouse Magazine covers from 70’s and 80’s – a fact that has been controversial.[20] When scouting for locations, it considers urban areas that can be revitalized.[21] After opening on Southwest Stark Street in Portland, Oregon American Apparel was joined by a vintage clothing store, sushi restaurant, shoe shop and modern-styled hotel.[21] In some cases, the company sublets parts of retail locations to other businesses of the same demographic, bringing additional retailers to previously unoccupied space.[21] The bulk of American Apparel retail venues are in New York City and California.[22][18]

AmericanApparelStore.com[23] is the company’s e-commerce sales hub.[24] It carries an online inventory of roughly 250,000 SKUs and receives 1.5 million visitors per month.[25] Online sales grew from $13.3 million in 2006 to $29.3 million in 2007.[25] The company site runs on the Yahoo Stores platform and is included in the Internet Retailer 500 Index.[25][26]

In late 2007, American Apparel opened a retail location for vintage clothing called California Select in Echo Park, a district of Los Angeles [27] Shortly afterwards, the company began selling vintage clothing through an Ebay store of the same name.[7][28] In 2008, the company was named “Retailer of the Year”, following Calvin Klein and Oscar de la Renta.[

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