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American Apparel

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American Apparel, Inc.
Company typePrivately held
Industry
Founded1989; 37 years ago (1989)
FounderDov Charney
Area served
Global
Key people
Paula Schneider (CEO)
ProductsClothing
Websitewww.americanapparel.com

American Apparel Inc. is a clothing retailer headquartered in Los Angeles, established in spring 1989 by Canadian entrepreneur Dov Charney. Originally recognized for its "Made in USA" vertically integrated production model,[1] after filing for bankruptcy and being acquired by Gildan, the brand now promotes itself as "Ethically Made—Sweatshop Free," with the majority of its garments produced in factories located in Honduras and Nicaragua.[2][3]

History

File:427 Broadway.jpg
American Apparel retail location in SoHo, New York City

Canadian-born entrepreneur Dov Charney founded American Apparel in 1989.[4] Initially, production took place in South Carolina.

The firm relocated to Los Angeles in 1997. At that time, Charney outsourced sewing operations to Sam Lim’s workshop under the Interstate 10 freeway in East LA, employing around 50 workers. Within months, they formalized a partnership.[5] By 2000, American Apparel established itself within the historic Alameda Square complex downtown Los Angeles, focusing on wholesale distribution of blank T-shirts to screenprinters, uniform suppliers, and fashion labels.[6][7] The company later expanded its operations to include retail outlets.

By 2005, American Apparel had achieved notable growth; it was ranked number 308 on Inc. magazine’s list of fastest-growing U.S. companies, boasting a three-year expansion rate of 440% and generating revenues exceeding US$211 million.[8] [9]

In late 2006, the company underwent a reverse merger that resulted in its listing on the American Stock Exchange.[10][11]

American Apparel was among the few U.S. apparel brands exporting garments labeled as "Made in USA"; by 2007, it had sold approximately $125 million worth of domestically produced clothing internationally.[12][13]

In 2010, auditors Deloitte & Touche resigned after raising concerns over the reliability of American Apparel’s financial statements for the previous year.[14] This event prompted investigations by both the U.S. Securities and Exchange Commission and the Southern District of New York's United States attorney's office.[15]

In April 2011, American Apparel announced it had raised $14.9 million by issuing approximately 15.8 million shares at $0.90 each to a consortium of Canadian investors led by Michael Serruya[16] and Delavaco Capital; these investors also received warrants allowing purchase of up to an additional 27.4 million shares. Two years later, in April 2013, the company completed a private placement offering $206 million in senior secured notes.[17][18] The funds were utilized to settle an existing high-interest credit facility with Lion Capital and Crystal Financial.[18]

In June 2014, following allegations concerning inappropriate conduct towards employees, American Apparel’s board removed founder, chairman, and CEO Dov Charney from his leadership roles.[19][20] Interim CEO duties were assigned to CFO John Luttrell while Allan Mayer and David Danziger were appointed co-chairmen.[21] Charney contested his removal through legal channels seeking reinstatement.Cite error: Closing </ref> missing for <ref> tag[22] The brand is widely recognized for its daring and often contentious promotional campaigns, largely driven by CEO Dov Charney’s creative vision. As reported by Adage, American Apparel's marketing efforts effectively "communicate the brand" directly between consumers.[23] While their sexually explicit ads have faced criticism,[24] they have also been praised for their authenticity and refusal to use airbrushing techniques.[25][26]

CEO Dov Charney describes the brand's ethos as that of a "heritage brand," embodying ideals akin to liberty, property rights, and the pursuit of happiness for individuals worldwide—essentially his interpretation of America.[27] Regarding international perception, advisor Harry Parnass emphasized that American Apparel represents aspiration and is fundamentally "selling the American dream."[28][29]

Visuals produced by American Apparel frequently showcase models with visible imperfections and asymmetries, accompanied by concise personal descriptions.[30] Models are often sourced directly from street encounters or company retail locations by Charney and his team; others submit their photos through the company website.[30]

The brand has incorporated adult film performers and glamour models into certain advertising campaigns, including Lauren Phoenix, Charlotte Stokely, Sasha Grey, Euguenia Diyordiychuk, and Faye Reagan.[31][32][33][34] The trade publication Adult Video News referred to American Apparel’s website as "one of the finer softcore websites available".[35][36] Several advertisements featuring nudity or sexual themes have been prohibited by advertising regulators. For instance, in 2009, a campaign appearing in VICE Magazine was banned in the UK due to concerns that it sexualized a model who appeared underage; American Apparel complied with this decision.[37][38] Additionally, a 2014 miniskirt ad depicting a model bent over with underwear prominently visible attracted criticism.[39] In a separate campaign from 2013, an ad showed a model lying on a bed with feet raised and no pants worn.[40] Another advertisement focused solely on a model’s crotch area without showing her face; this campaign was condemned by the UK Advertising Standards Authority as "voyeuristic" and exploiting vulnerability.[40]

At one point, Charney employed a marketing approach emphasizing his treatment of factory workers by promoting American Apparel as "sweatshop free".[41] In 2014, the company released a provocative ad featuring a topless model with "Made in Bangladesh" written across her chest to highlight its commitment to ethical labor practices.[40] In early 2008, a series of political advertisements were launched using the corporate logo to denounce current immigration policies as an "apartheid system".[42]

The firm received recognition as "Marketer of the Year" at the inaugural LA Fashion Awards in 2005.[43] Furthermore, an April 2007 survey published by Women's Wear Daily from Outlaw Consulting—an agency monitoring habits of consumers aged 21-27—ranked American Apparel as the eighth most trusted brand among clothing labels such as H&M and Levi's.[44]

In an unusual marketing event during 2007, artist Imp Kerr launched a fabricated American Apparel ad campaign throughout New York City. This hoax persisted for nearly a year until it was revealed that all visuals were digitally altered mockups. American Apparel later honored this stunt with a tribute advertisement featured on the back cover of Vice magazine compiling these fake ads.

By January 2008, market research firm Intelligence Group positioned American Apparel as their second most trendsetting brand globally after Nike.[45] Additionally in that year, The Guardian awarded American Apparel the title "Label of the Year".[46]

Between 2009 and 2014, photographers including Henrik Purienne and David Shama contributed significantly to shaping American Apparel's visual identity through numerous advertising campaigns.[47][48]

Lerappa

Lerappa (the word "Apparel" reversed) was a virtual private island created by American Apparel within Second Life to replicate the company's physical retail outlets. The virtual store, crafted by digital content creator Aimee Weber, officially launched on June 17, 2006. Spanning approximately 6,000-square-foot (560 m2) over two floors, the design mirrored American Apparel’s Tokyo showroom and showcased some of the brand’s provocative advertising campaigns on its interior walls. The structure predominantly featured glass and incorporated lighting that adapted to the virtual world's day-night cycle. Adjacent to the store stood a stage designated for live performances by virtual bands.

Within Lerappa, users could purchase authentic American Apparel garments as well as upcoming collections undergoing test marketing. Virtual clothing items were sold for under 266 Linden dollars (roughly equivalent to US$1) and came with discount codes redeemable on the company’s actual online store. Initially, 20 different styles were available for purchase. Additionally, customers had the option to buy real-world apparel directly through the virtual storefront. The primary goal of Lerappa was to serve as an innovative marketing platform rather than a traditional e-commerce site. Remarkably, during its first ten days, the virtual location generated revenue comparable to the daily sales of a standard physical retail store.

The presence of American Apparel in Second Life sparked opposition from protesters known as the Second Life Liberation Army, who criticized the company’s real-world use of sexually suggestive advertising imagery. In February 2007, the virtual store experienced disruptions when "virtual terrorists" deployed "white balls" within the space, temporarily obscuring parts of users' screens.

By the final quarter of 2007, American Apparel decided to exit Second Life and permanently shut down its virtual shop.

Woody Allen Billboard Controversy and Legal Action

In 2007, American Apparel displayed two billboards—one located in New York and the other in Los Angeles—depicting Woody Allen's character from the film Annie Hall, dressed as a Rabbi, accompanied by Yiddish text. These advertisements were exhibited for a duration of one week. According to Dov Charney, founder and CEO of American Apparel, the billboards served as a satirical commentary referencing both the movie scene and the parallel controversy surrounding the individuals involved. Woody Allen vehemently opposed the use of his likeness and initiated a lawsuit against the company seeking $10 million in damages. During a deposition in December 2008, Allen described the advertising campaign as "sleazy" and "infantile."

Although American Apparel asserted as early as May 2008 that the billboards were intended purely as a form of social parody, there was considerable speculation about whether Allen’s personal history, particularly his relationship with Soon-Yi Previn, would be invoked by the company’s legal team as part of their defense strategy. Charney denied these claims, emphasizing that his statements were safeguarded under the protections granted by the First Amendment.

In May 2009, American Apparel’s insurer agreed to settle the lawsuit for $5 million (approximately $Template:Format price adjusted for inflation), which represented half of Allen’s original claim. The majority of this payment was covered by the insurance provider. Charney expressed that, personally, he would have preferred to pursue the case further and bring it to trial.

Legalize LA, Legalize Gay, and Pride

Main article: Legalize LA
File:LegalizeLA.jpg
Legalize LA campaign with CEO Dov Charney

Beyond its involvement in numerous immigration demonstrations, the company initiated an advocacy and advertising effort titled "Legalize LA".[49] This initiative included advertisements placed in prominent national publications such as The New York Times, alongside billboards, bus advertisements, T-shirts, and posters.[42] Additionally, the company hosts a Legalize LA section on its website that provides updates on immigration reform, details about the brand’s involvement, and historical context regarding the topic.[50]

Following California's November 2008 approval of Prop 8, which legally defined marriage as between one man and one woman, American Apparel introduced the Legalize Gay campaign.[51] This campaign mirrored the style of Legalize LA and featured apparel bearing slogans such as "Legalize Gay" and "Repeal Prop 8," which were sold by the company.[52]

In June 2012, American Apparel collaborated with the Gay and Lesbian Alliance Against Defamation to launch a new collection of T-shirts commemorating LGBT Pride Month.[53][54] Fifteen percent of profits from these shirts were contributed to GLAAD.[53] This line featured Isis King as a model, marking American Apparel’s first openly transgender representation.[53] By summer 2013, the company expressed interest in recruiting more "transexy" models.[55]

In 2013, American Apparel earned recognition from TheStreet.com as one of the "8 Pro-Gay Companies".[56]

Canada

In an advertisement published in Canadian alternative weeklies during November 2010, the company identified itself as "a majority Canadian-owned enterprise, established and managed by Dov Charney, a native of Montreal." The advertisement further emphasized, "Ultimately, one of the key factors that distinguishes American Apparel is its Canadian roots."

In pop culture

Kanye West's 2010 album My Beautiful Dark Twisted Fantasy includes the track "Gorgeous," featuring Kid Cudi and Raekwon, which contains the lyric: "I need more drinks and less lights, and that American Apparel girl in just tights."

The 2013 song "Farrah Fawcett Hair" by Capital Cities features a verse where André 3000 enumerates various things he admires, concluding with "getting tucked in every night for a month by the American Apparel ad girls." This track inspired a parody entitled "American Apparel Ad Girls," performed by Willam Belli, Courtney Act, and Alaska Thunderfuck 5000.

In February 2014, 5 Seconds of Summer released their popular single "She Looks So Perfect," which includes the line: "You look so perfect standing there in my American Apparel underwear."

Corporate culture and employment

File:AmericanApparelNight.jpg
Exterior view of the American Apparel manufacturing facility in Los Angeles.

American Apparel’s operational model concentrates the majority of its workforce at a single site. Founder and former CEO Dov Charney believed that avoiding outsourcing allowed him to build closer relationships with employees and directly connect them to the brand. He stated that having engineers, designers, finance personnel, knitters, dyers, and chemists co-located fosters collaboration on improving production efficiency beyond what outsourcing could achieve. A banner atop the downtown factory proclaims "American Apparel is an Industrial Revolution."

Charney also remarked that hiring decisions for creative roles were based on cultural fit and fashion sensibility rather than formal resumes. However, the company faced criticism for emphasizing personal style and appearance in recruitment for retail positions. According to Charney, the company's unconventional workplace environment fueled its innovation and rapid expansion. He highlighted that openness about sexuality and company culture appealed to younger demographics who valued authenticity.

Despite these assertions, American Apparel's atypical corporate culture attracted scrutiny. Charney admitted to engaging in sexual relationships with employees and was reported to have masturbated multiple times and received oral sex from an employee during interviews conducted by a writer for Jane magazine.

Production

American Apparel emphasizes vertical integration by overseeing nearly every phase of its supply chain. This approach entails owning and managing the factories responsible for manufacturing most of the products they offer. By maintaining direct oversight from the sourcing of raw materials through to the completed garments, the company can uphold ethical and sustainable standards. This comprehensive control enables American Apparel to reduce environmental impact while ensuring equitable wages and benefits for workers.

In instances where the company lacks specific machinery or sufficient production capacity, it partners with external contractors and suppliers for particular tasks or items. When outsourcing, American Apparel implements a rigorous evaluation process to verify that these third parties meet their quality benchmarks, labor policies, environmental commitments, and adhere to the company’s Code of Conduct. Additionally, contractors are required to comply with international regulations such as those set by Worldwide Responsible Accredited Production (WRAP) and the Fair Labor Association (FLA).

Sexual harassment lawsuits

By 2012, American Apparel had faced seven publicly known sexual harassment lawsuits; all were either dismissed, resolved through arbitration, or settled without financial liability for the company. Many of these cases were directed to arbitration because employees were contractually obligated to waive their rights to legal claims against Charney or American Apparel. One notable lawsuit involved four former models accusing the company of sexual harassment, including a separate plaintiff seeking $250 million; this case included allegations involving nude photographs, suggestive text messages, and monetary demands. Subsequently, the company was accused in another suit of leaking these private images online, though a New York City judge dismissed this claim in 2012.

In one instance, American Apparel faced criticism from the Second Appellate District for a settlement in which the plaintiff agreed she had not experienced sexual harassment. The company attempted to release a statement referencing an arbitration hearing that never actually occurred due to the plaintiff’s attorney failing to appear. Interestingly, that same lawyer later represented Dov Charney in subsequent legal matters defending against sexual harassment and assault accusations. As of 2013, only a single class-action lawsuit representing all female employees remained active; this suit did not contain specific allegations against Charney himself.

American Apparel has consistently characterized these lawsuits as extortion attempts aimed at pressuring the company financially and has launched advertising campaigns to express this stance. Charney has repeatedly denied all allegations of misconduct, stating that any claims of improper behavior are entirely unfounded. In June 2014, the board removed him from his role as chairman and terminated him as CEO. Following his dismissal, Charney filed several defamation suits classified as Strategic Lawsuits Against Public Participation (SLAPP), which were ultimately dismissed by courts.

In December 2014, after several months on suspension, Dov Charney was officially removed as Chief Executive Officer. His successor, Paula Schneider—formerly president of ESP Group Ltd., known for brands like English Laundry—assumed leadership on January 5, 2015.

On July 1, 2025, Netflix released an episode within its docuseries "Trainwreck" that examined working conditions at American Apparel. The episode featured interviews with former employees who shared insights into both positive and challenging experiences within the company. It highlighted extended work shifts lasting up to 36 hours and addressed controversies surrounding Charney, including allegations of sexual harassment involving women and minors.

Labor

By 2008, the company had a workforce exceeding 10,000 employees and managed over 200 retail outlets across 20 different countries. Its manufacturing staff received an average hourly wage of $12. According to the San Francisco Chronicle, factory workers at this company earned between $80 and $120 daily, amounting to approximately $500 per week—significantly higher than the typical $30 to $40 daily earnings at most garment factories based in Los Angeles. Workers commonly put in hours from 7:45 a.m. to 4 p.m. with a lunch break, and sewing machine operators often made more than $500 weekly.

In addition to wages, employees benefited from paid time off, healthcare coverage, company-subsidized meals, bus passes through the Los Angeles County Metropolitan Transportation Authority, complimentary English as a Second Language classes, on-site massage therapy, free bicycles with maintenance services available on location, and complimentary parking. The factory floors were equipped with appropriate lighting and ventilation systems. Each level of the facility featured free telephones allowing workers to make and receive long-distance calls at no cost.

However, workers employed in the company's overseas locations did not receive the same hourly rates as those in Los Angeles. In China, for instance, wages were set at or above the U.S. federal minimum wage per hour worked, as confirmed by company statements. Following its initial public offering, American Apparel extended stock grants valued up to $40 million to its employees. This initiative provided roughly one share of stock for every workday completed at the company. Approximately 4,000 employees qualified for this stock distribution program.

Historically, American Apparel maintained a waiting list of over 2,000 individuals seeking employment. In 2010, after a U.S. immigration investigation uncovered that around 1,500 workers lacked proper documentation and were subsequently terminated, the company actively sought new staff members.

The New York Times journalist Rob Walker discussed related labor controversies in his book Buying In, noting that Sweat X—a company once held up as a model for American Apparel's unionization efforts—had since ceased operations. Walker quoted Charney candidly stating that "[Sweat X] ... fucking failed."

The contrast between American Apparel and Sweat X was explored in the 2010 documentary No Sweat.

In 2015, American Apparel engaged Cruz & Associates, a firm specializing in anti-union activities. The company compensated Cruz & Associates with a total of $462,343 for their services.

Immigration issues

Since 2001, American Apparel has actively championed changes to U.S. immigration policies. On May 1, 2002, the company temporarily closed its manufacturing facility to enable many of its immigrant employees to join a pro-immigration demonstration held in downtown Los Angeles. Dov Charney, a Canadian national and the company's founder, also took part in the march alongside the workers. Each year, American Apparel continues to support the May 1st Immigration March and Rally in Los Angeles. In 2008, the company introduced a procession route from their factory that merged with other participants near city hall. These political efforts eventually evolved into the Legalize LA advertising campaign.

In 2009, an audit conducted by ICE revealed inconsistencies in the employment documentation of approximately one-quarter of American Apparel's workforce, suggesting that many were undocumented immigrants. Consequently, around 1,500 employees were dismissed that September. The company questioned the efficacy of such measures, stating that "[the firings] will not help the economy, will not make us safer," and emphasizing that regardless of how undocumented workers are classified, they remain diligent and tax-contributing members of the workforce. This ICE investigation aligned with President Obama's revised approach to immigration enforcement, which favored less conspicuous methods over large-scale raids. CEO Dov Charney assured that those terminated due to documentation issues would receive "priority treatment" for future job interviews once their immigration status was regularized. Reflecting on the impact of losing these employees, Charney noted that it disrupted operational efficiency, caused delays in garment deliveries, resulted in significant financial losses, and diminished the company's overall agility.

Environmental policies

The company prioritizes environmentally friendly methods and has gained recognition for its sustainability innovations, largely due to its vertically integrated operations. American Apparel’s manufacturing approach centers on the principle of "Creative Reuse," which transforms leftover fabric from one garment pattern into multiple other products such as bathing suit tops, belts, headbands, bows, bras, underwear, and children's apparel. This practice not only minimizes fabric waste but also broadens the product range while conserving approximately 30,000 pounds of cotton weekly.

American Apparel also supports a bicycle lending initiative for its workforce and is acknowledged by People for the Ethical Treatment of Animals as a vegan-friendly apparel brand. By 2007, the company aimed to increase its organic cotton usage from over 20% to 80% within four years. Additionally, American Apparel offers a "Sustainable" collection consisting entirely of 100% USDA organic cotton shirts. In 2008, the company acquired more than 30,000 pounds of organic cotton known as B.A.S.I.C cotton.

In 2006, the company installed a 146-kilowatt solar electric system atop its factory roof with the goal of cutting energy expenses by at least 20%. This solar array supplies up to 30% of the factory’s electricity needs.

Philanthropy

In 2005, the company organized a bikini car wash fundraiser in collaboration with the American Red Cross to support those affected by Hurricane Katrina. Alongside this event, they prepared and shipped 80,000 shirts to aid relief efforts in New Orleans and the Gulf Coast region. As a sponsor of Farm Aid, American Apparel provides the plain shirts that are printed and sold as official merchandise for the organization. Near the end of 2007, just before the holiday season, the company contributed over 300,000 clothing items, focusing on distribution to homeless individuals in major metropolitan areas. In 2009, American Apparel held a "Justice for Immigrants" factory sale in Los Angeles, with proceeds directed to several groups including Casa Libre Immigrant Children's Homeless Youth Shelter, the Center for Human Rights and Constitutional Law, the Coalition for Humane Immigration Reform of Los Angeles, Hermandad Mexicana Latinoamericana, and the National Day Laborers Organizing Network.

Following the 2010 earthquake in Haiti, American Apparel donated apparel valued at more than $400,000 through Fashion Delivers and supplied over 5,000 pairs of socks to Soles4Souls, a charity focused on providing footwear.

Criticism

In October 2013, American Apparel faced backlash due to a display in one of its New York locations that was deemed "culturally insensitive." The exhibit incorporated visuals linked to Traditional African religion and Afro-American religion, provoking strong reactions from followers of several faiths such as Haitian Vodou, Louisiana Voodoo, West African Vodun, Cuban Santería, among others.

See also

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References

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  13. ↑ New York Post, T-Shirts, As Far As the Eye Can See, Maxine Shen, March 24, 2004 Archived January 8, 2014, at the Wayback Machine
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  17. ↑ American Apparel Refinances With Private Bond Offering. WWD.com 4/5/2013
  18. ↑ 18.0 18.1 American Apparel Prices Offering of $206 Million of Senior Secured Notes Archived 2015-09-24 at the Wayback Machine. Reuters.com 4/5/2013
  19. ↑ Lua error in Module:Citation/CS1/Configuration at line 2123: attempt to index field '?' (a nil value).
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  22. ↑ BenCorman.com June 2008 notes that "All advertisements are produced in-house."
  23. ↑ Matthew Creamer, Advertising Age’s editor-at-large, remarked that Charney’s team consistently crafts advertisements that "telegraph the brand".
  24. ↑ aufeminin highlighted controversies surrounding campaigns bordering on pornographic content.
  25. ↑ ABC News commended the brand for "Sexy Sweats Without the Sweatshop".
  26. ↑ The San Francisco Chronicle noted the inclusion of adult film stars in their underwear campaigns.
  27. ↑ ABC News interview with Dov Charney, April 27, 2012
  28. ↑ CNBC’s Made in China segment, July 21, 2008
  29. ↑ AmericanApparel.net Daily Update, August 1, 2008
  30. ↑ 30.0 30.1 New York Times Magazine feature by Jamie Wolf, April 23, 2006
  31. ↑ Fleshbot.com article dated July 31, 2009
  32. ↑ Blast Magazine coverage from August 1, 2008
  33. ↑ Jezebel.com report January 20, 2009
  34. ↑ Domino magazin commentary on controversial ads
  35. ↑ American Apparel photo gallery archived January 20, 2013
  36. ↑ AVNOnline column dated February 1, 2006
  37. ↑ BBC News report September 1, 2009
  38. ↑ Press release responding to UK Advertising Standards Authority inquiry
  39. ↑ E! Online article March 28, 2014
  40. ↑ 40.0 40.1 40.2 New York Daily News feature on controversial ads
  41. ↑ Los Angeles Business Journal article May 31, 2004
  42. ↑ 42.0 42.1 ABC News coverage January 18, 2008
  43. ↑ Lasplash.com coverage of LA Fashion Awards 2005
  44. ↑ MediaPost report April 20, 2007
  45. ↑ Cassandra Report by Intelligence Group January 2008
  46. ↑ The Guardian article November 30, 2008
  47. ↑ Visualmelt.com profile on Henrik Purienne
  48. ↑ WeAreCasey.com portfolio featuring David Shama's work for American Apparel
  49. ↑ The May Day Marches, Claire Hoffman, Los Angeles Times, 2006-05-02. "The iconoclastic chief executive of American Apparel Inc. not only gave 3,300 of his employees the day off, but he also supplied them with T-shirts emblazoned with a pro-immigration message". "By noon, Charney had left the factory and joined his workers and their families, who had arranged to march together on Broadway". "American Apparel, with about 130 stores around the world, has a history of supporting May Day marches: In past years, employees were given half the day off and bused to protests".
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  51. ↑ Lua error in Module:Citation/CS1/Configuration at line 2123: attempt to index field '?' (a nil value).
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  56. ↑ 8 Pro Gay Companies For A Socially Accepting Portfolio TheStreet.com "Kapitall" 03/28/13 – 10:47 AM EDT

External links

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