American Apparel has built a reputation as a hyper-sexualized, envelop-pushing brand with ad campaigns featuring provocative poses and inessential nudity - but now they may not have enough money to keep their doors open.
CEO Paula Schneider said their team is working hard on making the fall assortment a strong revenue driver but it may not be enough for the company to stay in business without outside help. In a press release published on their website, American Apparel said for the next phase of its turnaround plan, it's attempting to enforce a plan to reduce operating expenses by $30 million.
"Even if American Apparel increases revenue and cuts costs, there can be no guarantee that the company will have sufficient financing commitments to meet funding requirements for the next 12 months without raising additional capital, and there can be no guarantee that it will be able to raise such additional capital," the company said in a statement.
Between sinking sales and mounting legal fees due to controversial ads, American Apparel says they plan to close underperforming stores while opening others with more promising demographics, as well as to "streamline its workforce to reflect a smaller store footprint and general industry conditions."
While the vast majority of layoffs are rumoured to be in the company's head office and retail locations, it will be interesting to see if this international business will have enough money to continue to operate and fully overcome the stigma placed upon itself by former CEO Dov Charney.
It was Charney's aim for American Apparel to live beyond his lifetime. He said, "We'll be a heritage brand. It's like liberty, property, pursuit of happiness for every man worldwide. That's my America."
💋 Megan xo.
Time Magazine's Person of the Year in 2006.