American Apparel
Product: Manufacturer of apparel, fashion industry trailblazer, manufactured in the US
Key attributes: Colorful basics, provocative marketing
At its peak:
No. of stores: 230 worldwide
Sales: US$600mn
At the time of closure:
No. of stores: 110 in the US
Employees: 2,400
Causes of failure
1. Rapid expansion - American Apparel rapidly expanded stores
2. High debt - it had taken high debt for rapid expansion
3. Changing customer tastes - people preferred the new fast-fashion brands H&M, Zara, Forever21. Customers also were cutting down clothing purchases in favor gadgets.
4. Boardroom battles - led to litigation and a merry-go-round of directors and top executives that distracted American Apparel from turning around the business.
5. High cost of manufacturing - The high cost of manufacturing in Los Angeles also contributed, analysts said, noting that California’s minimum wage will climb to $15 an hour in 2021.
6. Industry changes: “The global retail industry has faced strong headwinds across the board, and American Apparel has been no exception to this rule,” the company said Monday in a statement.
Other comments:
L.A. has always been a design mecca for apparel … but increasingly, they are having to offshore their operations. That’s the brave new world we are finding ourselves in in 2017.
Workers plight:
Francesca Cortes, a seamstress who works on the overnight shift, said she was told to come into work Monday for a possible shift change. Instead of a new schedule, she got her final paycheck and a termination letter.
“Everything is over,” said Cortes, 48, who has worked seven years at American Apparel. “We didn’t even get severance, like the workers who were laid off before got.”
Amada Cervantes, 66, has been sewing in downtown L.A. for a decade. In the last few years, her pay has dropped to about $350 a week from $500 as workers’ hours have been cut.
“I’m worried because I am on my own,” Cervantes said. “I’m hoping unemployment will help until I find another job.”
Some workers will find employment with other Los Angeles garment and textile makers.
Broncs Inc., a Compton textile manufacturer, bought American Apparel’s Garden Grove knitting and dyeing facility and will keep about 200 employees.
Zack Hurley, chief executive of Indie Source, said he plans to hire at least a few dozen American Apparel workers for his contract manufacturing facility in downtown Los Angeles.
http://www.latimes.com/business/la-fi-american-apparel-layoffs-20170116-story.html
Product: Manufacturer of apparel, fashion industry trailblazer, manufactured in the US
Key attributes: Colorful basics, provocative marketing
At its peak:
No. of stores: 230 worldwide
Sales: US$600mn
At the time of closure:
No. of stores: 110 in the US
Employees: 2,400
Causes of failure
2. High debt - it had taken high debt for rapid expansion
3. Changing customer tastes - people preferred the new fast-fashion brands H&M, Zara, Forever21. Customers also were cutting down clothing purchases in favor gadgets.
4. Boardroom battles - led to litigation and a merry-go-round of directors and top executives that distracted American Apparel from turning around the business.
5. High cost of manufacturing - The high cost of manufacturing in Los Angeles also contributed, analysts said, noting that California’s minimum wage will climb to $15 an hour in 2021.
6. Industry changes: “The global retail industry has faced strong headwinds across the board, and American Apparel has been no exception to this rule,” the company said Monday in a statement.
Other comments:
L.A. has always been a design mecca for apparel … but increasingly, they are having to offshore their operations. That’s the brave new world we are finding ourselves in in 2017.
Workers plight:
Francesca Cortes, a seamstress who works on the overnight shift, said she was told to come into work Monday for a possible shift change. Instead of a new schedule, she got her final paycheck and a termination letter.
“Everything is over,” said Cortes, 48, who has worked seven years at American Apparel. “We didn’t even get severance, like the workers who were laid off before got.”
Amada Cervantes, 66, has been sewing in downtown L.A. for a decade. In the last few years, her pay has dropped to about $350 a week from $500 as workers’ hours have been cut.
“I’m worried because I am on my own,” Cervantes said. “I’m hoping unemployment will help until I find another job.”
Some workers will find employment with other Los Angeles garment and textile makers.
Broncs Inc., a Compton textile manufacturer, bought American Apparel’s Garden Grove knitting and dyeing facility and will keep about 200 employees.
Zack Hurley, chief executive of Indie Source, said he plans to hire at least a few dozen American Apparel workers for his contract manufacturing facility in downtown Los Angeles.
http://www.latimes.com/business/la-fi-american-apparel-layoffs-20170116-story.html
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