American Apparel: Worst Week Ever?
Eric Richardson
American Apparel CEO Dov Charney during a march for immigration rights on May 1, 2009.
DOWNTOWN LOS ANGELES — Downtown-based American Apparel and controversial CEO Dov Charney are no strangers to international attention thanks to the company's salacious ad campaigns and sexually-charged reputation. This week, though, the clothing company's media spotlight has been thanks to its numbers, not its image.
The retailer has been facing financial troubles since last year’s immigration crackdown that caused the loss of 1,800 employees. In June, the company received a warning from the New York Stock Exchange that it was late filing financial reports. This week the company suffered several other setbacks that media reports say threaten to bankrupt it, leaving its future as the largest private employer Downtown up in the air.
On Monday, American Apparel announced that the company had received another letter from the New York Stock Exchange warning the retailer that the deadline was long past for the company to file a Quarterly Report. By not filing Form 10-Q on time, American Apparel is at risk of losing its listing on the NYSE.
The company has also been the target of up to three class action lawsuits in just two weeks over concerns that the company misled shareholders.
Shares of company, which trades as APP, fell to an all-time low of 66 cents per share on Wednesday. At the closing bell on Friday the shares had rebounded slightly to 82 cents.
Guest on August 27, 2010, at 07:59PM – #1
I live downtown and the "provocative" signs on their building are pretty ridiculous. Especially now that I learn that 1,800 of their employees were apparently without papers. According to Wikipedia (not the most reliable source) he has earned praise for refusing to "outsource". If employing people that don't have papers is not outsourcing then I suppose we can call it insideoutsourcing.
This is a very sad story, I basically like him, and hate him. He should shut his loud mouth and rely on delivering goods to people that they want, for reasonable rates, and keep his political views to himself.
In the end he is a businessman, with all the ethical conflicts that entails, and he tried to come off like he's a saint. He's not, not I, nor anyone I've met.
Whether Wall Street loves you or not, your an interesting Angelino Dov Charney, so put down your pretense and deliver.
Fabricio Vai (@dataxy) on August 27, 2010, at 10:48PM – #2
This company started doing bad from the moment they tried too hard to build a reputation of 'the most minority friendly company around'. An issue they should have stayed away to begin with and instead gain a reputation by... making best products like any other company would. They shot themselves in the foot.
Guest on August 27, 2010, at 11:42PM – #3
their stuff is just really shitty quality. no wonder they are in trouble. i'm surprised they lasted this long.
Guest on August 28, 2010, at 12:05AM – #4
Blame it all on Dov. He's been running that company into the ground for years. Wouldn't be the first company he's bankrupted. I know lots of people that have worked for him and it's really no surprise. He's an overly abusive asshole that deserves everything that's coming to him.
J-M on August 28, 2010, at 12:50AM – #5
The whole immigration issue is fishy and beside the point. American Apparel makes THE best t-shirts on the market. The rest of their stuff is pretty much crap as far as I'm concerned and the whole 80's revival thing is dead and gone (thank God). The main problem, as far as I can tell, is that their products are grossly overpriced. Even when the recession hit, they were the only major clothing retailer that didn't offer discounts. They were counting on the 20-something buyers continuing to pay stupid prices and thought they could sustain that momentum, opening more and more stores. I love the fact that the t-shirts are made Downtown, but they need more realistic prices. And, I hope that doesn't involve outsourcing production, which is what investors are pushing for. There's got to be a way to maintain a good, local product at affordable prices. They're not the Gap. Dov Charney will have to focus on design (sigh) and someone else will have to take over the business side of things. It happens to all great companies. But, please, focus on your core market: t-shirts!
Guest on August 28, 2010, at 02:50AM – #6
I've recently done some research on this company. American Apparel is 'minority friendly' due to the hiring of hard working people who eventually hope to gain residence status. They pay them a living wage and do not exploit them whatsoever. The problem they have is with Dov's creepy sexual attraction to young-looking girls.
Guest on August 28, 2010, at 04:28PM – #7
Shouldn't we be offended that a Canadian pornographer was using illegal labor to sell crappy overpriced underwear? What part of this is American? Yet he was recognized by City Council for his contributions to the City. They should send somebody over to his office and take the certificate back! Who needs a really big factory? There must be someone who wants to open a legal business downtown... preferably someone who doesn't need a subsidy. If not, why not...
J-M on August 28, 2010, at 08:36PM – #8
All the workers there now are legal, so enough with the immigrant bashing. It's a moot point.
Jorgie on August 29, 2010, at 08:43AM – #9
Unfortunately this guy is a quirky weirdo who started off with a good idea, and made a surprising success in a diffiult industry. His weirdness caught up with him and rightfully so.. Karma is a biatch!
Guest on August 29, 2010, at 05:56PM – #10
Remember when Walmart was all Buy American?
Chris Loos on August 29, 2010, at 10:22PM – #11
@Guest 3
"their stuff is just really shitty quality. no wonder they are in trouble. i'm surprised they lasted this long."
Actually their shirts of very high quality. That's why so many other t-shirt designer prints their stuff on American Apparel shirts. Their shirts are light, they stretch to fit your body, and always shrink back to their original shape, never "shrinking up". Have you ever actually tried their clothes, or are you just trying to jump on the bandwagon?
Bash them for their ads, bash them for their business failings, but don't bash them for your clothing when you clearly don't have a clue.
Christophe Serafino on September 01, 2010, at 08:30AM – #12
I second Chris Loos.
El Dabe Sherif on September 01, 2010, at 09:05AM – #13
Guest #1 really encapsulates how I feel. Also, Business men, especially those running public corporations, should say as little as possible unless it benefits the shareholders. He is an interesting guy, and therein lies the problem. He wants to live, be himself, take photos, etc, but he has this major obligation of running the company. The lawsuits against him are always mentioned as some kind of proof he cannot runt he company, but those are not a big deal. There is a saying; "If you haven't been sued, you are not in business".
El Dabe Law Firm - Los Angeles Lawyers
Guest on September 01, 2010, at 02:13PM – #14
"He should shut his loud mouth and rely on delivering goods to people that they want, for reasonable rates, and keep his political views to himself."
Yeah, business people and corporations NEVER use their assets and wealth to influence politics.
Don't follow politics much, do you?