Known for its proud ” Made in American” status, American Apparel was one of the most biggest clothing phenomenon to ever hit North America. The company uses “real girls” on their campaigns, showing blemishes and imperfections and all natural bodies. They gravitate to a young “hip” audience by selling the basic streetwear, captivating them with unique organic premium cottons & slim fit silhouettes with various colors to choose from. Despite their later questionable over the top risque ads it become the most recognizable symbol for millenials buying AA’s innovative athleisure, “vintage”lounge, trendy wear that made sales boom, they then began expanding overseas and eventually became a publicly traded company but
It’s not until 2014 that the company began to down fall for several reasons.
American Apparel inc is known for your basic fashion favorites for women, men and kids, and even pets. They target a millennial with a innovative simple everyday lifestyle, and futuristic, social outlook. Most of them just started school or is just starting their lives ( mostly women) The company is prideful of there made in america and sweatshop-free slogan which help them in their favor because there consumers like to know how their clothes are made and who made them. Dov believed that every employee in the company should be treated the same. He challenged the labour laws by paying higher wages and giving health care benefits, which was unheard of at the time. the company targets customers with motives that when they buy American Apparel’s product, that they not only buy a hip clothing but also support to create jobs in USA. (Henzi. “American Apparel.” Ch.8 Segmenting and Targeting Markets,2011) This psychographics is very social aware group and loved that idea, they see themselves as unique, and don’t like to dress up to much yet still look fashionable. AA pushed with there realistic campaigns and the trendy clothes with non photoshopped models that made consumers feel like you can look like the typical girl next door. Despite the ‘moderate” pricing, since this groups income is less than 10,000 the customers cult like obsession with the company allowed it to grow, there was nothing like american apparel inc at the time.
Dov Charney founded american apparel inc in 1989, he is a canadian who loves american vintage clothing and started selling t-shirts as a small start up company at his college at 20 years old. With a family loan he then made that hobby into a full time career, creating American Apparel. AA is the clothing manufacturer, wholesaler, and retailer that also performs its own design, advertising, and marketing. Therefore In the year 2000 American apparel moved to the heart of LA into a 800,000 square foot warehouse stated in (Contributor in clothing, Highsnobiety, 2016) their first store started in 2003 and by 2005 the company was making over half a billion dollars a year and continued to expand. In 2006 AA made a stock deal of $280 millions dollars with Endeavor Corp making them a public company and operating in countries overseas like Europe, Asia, and latin America owning 242 retail stores in 20 countries.(timelines.latimes, 2014, & mergent online) it was becoming one of the fastest growing companies, with a annual revenue that topped $211 million. AA geographics segmentations was a big help as well they placed themselves in urban areas, around lifestyle streets were young urbanites shop and even lived. They are focused on drawing in young adults in those areas because they more invest in fashion.
However throughout time the loving American Apparels good name began to tarnish after concerversy actions CEO Dov Charney started to face lawsuits . One was their distribution strategy, Their risque ads turned into controversial and racy, and by 2005 the company was facing three sexual assaults. This detrated the consumers trust with the company and consumers began to shift to retailers that offered cheaper, fast fashion, trendy looks, such as urban outfitters, who was a competitor at the time. In addition customers as times were changing were not into the basics anymore, they wanted items that looked exclusive “designer” wear in there budget, American Apparel was not trying to evolve against growing companies like zara and H&M .
In 2009 the company began to wrestle with debt and decline in sales and there shares went down 21%. (mergent.online) in that same year a government raid of the factor exposed that 1,600 of workers working in american apparel were working illegally (associated press, 2009) This in total the company was facing a lot of noise and lost its market image. The company then filed for chapter 11 bankruptcy and with a net loss of 13,100,00 from what once 25,900,000 Despite the negative surrounding the company, I know American Apparel can regain its credibility. The first step they took was to fire Dov and hire New CEO Paula Shinder, who made a pro women ad to regain back female following. She quotes that on new advertising ” it doesn’t have to be over sexual” (Juilie Zebro, dazeddigital, 2015) I know that in order to keep this company sustainable we would need to retain the customers trust and values, create a AA online community, and renew positive brand image. It is stated that 63% of millennials stay updated on branded through their social medias, they have opinions and questions about what there buying and a passionsion for environmental issues, and because of controversy with American apparel it ran consumers away. They should stay committed to there quality products and technology (sustainable advantage) and handle employee care better. Consumers, especially millennials in my opinion are always looking for for the best products in the lowest prices. They are socially aware so focusing on empowerment and diversity is a good strategy. Lastly budgeting, this will help marketing strategy, so that hopefully by at least 2020 they can be as fast fashion as there competitor Zara and try to get new garments out and touch on all new streetwear trends as soon as possible. I believe that experiencers and believers compare with American apparel. (VALS) they are risky and are willing to spend high income on fashion on places that have uniqueness however they fight for morals. American Apparel knows who their target market is, they need to focus on getting their attention back.