The once hipper than hip hipster clothes store American Apparel may have been saved from bankruptcy today by selling it's shares at a discounted rate to a Canadian led group of private investors.
Reports of financial instability have been rife since August last year when their auditors resigned over "material weaknesses" in the company's financial controls. The store, considered the coolest thing since fixie bikes upon it's arrival in London in 2004 and Dublin (belatedly) in 2009, has been dealing with a long running sales slump as well as several sexual harassment suits filed against controversial CEO Dov Charney.
Beloved of the trendy youth, American Apparel specialises in cotton basics - tshirts, leggings, tracksuit bottoms, hoodies - made in an entirely vertically integrated way at their LA factory, with an emphasis on environmentally friendly manufacturing, and a pro-immigration stance. But, the brand seems to have been unable, or unwilling, to develop. As Amelia Hill wrote in The Guardian last August "for a company who took the humble T-shirt from basic item to fashion icon, to fail to catch on to this year's hot look – the soft jersey cotton T-shirt – is quite a lapse."
In a way, they have pigeon-holed themselves, at least on this side of the Atlantic. They have a reputation for being the brand of choice for a certain type of 'there's something retro on my necklace' hipster and their advertising, their staff, and their recruitment policies may have alienated them from quite a large demographic who would buy responsibly sourced basics. As The Guardian points out, with the onset of the recession, the company has also found itself trapped in the limbo of the high end of the middle market. And, they have a peculiar policy of rarely having a sale. A sale in London last spring ended in hipster handbags at dawn.
It would be a pity if they went as there are a lot of good things about the company, but at least if they end up liquidating they might have a decent sale...
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