This is the second in a series of obituaries for late, maybe-great clothing retailers and the symbols they once provided. The first, for the Abercrombie and Fitch logo, is here.
American Apparel, go-to clothier for the shopper progressive enough to seek out sweatshirts made in the sweatshop-free USA but not so progressive as to be repelled by the ick-factor of the retailer’s (recently removed) founder Dov Charney, filed for bankrupty on Monday.
This Chapter 11 news comes on the heels of a just-struck debt-for-equity deal with 95 percent of American Apparel’s secured lenders; the arrangement was made in an effort to keep the 130 American Apparel stores located in the U.S. open and to maintain manufacturing operations in Los Angeles. Approximately 4,600 sewing and manufacturing workers in Southern California are in American Apparel’s employ.
Should the bankruptcy court in Delaware approve it, the restructuring would take the company private, cede almost total control to the biggest bondholders, and eliminate the majority of American Apparel’s current shareholders. That includes Charney, who has a stake in the company is worth a reported $8.2 million.
It is important to note that American Apparel may one day emerge from bankruptcy and rise, a sparkly-spandexed phoenix from the ashes, to outfit our nation’s youths once more. Tastes might be fickle but style is cyclical; this morning, this reporter spotted a girl walking her dog while wearing Birkenstock sandals, so, what is dead may never die.
But if and when that day comes, it is highly unlikely that Charney will be involved in even the tiniest of ways. Charney was fired “for cause” last December, following his suspension for a series of sexual misconduct allegations. (More on that later.) And so it is the American Apparel he hatched, the brand that zipped up debauchery in homegrown hoodies for hipsters, that we grieve today. It was 17 years old.
His replacement, the possibly-glass-cliffed first female CEO Paula Schneider — she did, after all, inherit a company that had hemorrhaged $300 million in just five years and had, since 2009, failed to turn a profit — told the Los Angeles Times that there will be no offshoring in the retailer’s future: “You can’t have American Apparel without apparel made in America.” But bankruptcy was the right call, she claimed, because American Apparel “had no liquidity.”
“The debt structure was the biggest impediment that we have,” she said. “When you have over $300 million in debt and are paying $35 million-plus in interest rates, it’s not a sustainable business model.” She’s not planning additional layoffs at the moment (her tenure has already seen the layoffs of over 180 workers), only the closure of a handful of “underperforming” stores.
Meanwhile, since the end of June, revenue has dropped by 17 percent, the fourth straight quarterly decrease in a row. The stock is so low that the New York Stock Exchange has threatened to remove the company from its rankings entirely. (You could’ve scooped some shares up yourself last Friday, when they were selling at 11 cents a pop.)
Of all the times for American Apparel to potentially go under, this is perhaps the cruelest of all: We are just weeks away from Halloween! How to explain what Halloween means to American Apparel — nay, what American Apparel means to Halloween? American Apparel is to Halloween what Betsy Ross is to patriotism: Sure, the latter did, at one time, exist without the former. But to what end? How did it express itself? It was a sad little shadow of what it could be.
The founder of American Apparel, obsessed since the beginning with making arguably the most American garment on the market — T-shirts — in America, was born in Montreal. The Choate Rosemary Hall alum (though rumors suggest he was expelled from the elite boarding school during spring of his senior year, Choate representatives confirmed to ThinkProgress that he enrolled in the fall of 1986 and graduated in good standing in June, 1987) moved to Columbia, South Carolina after dropping out of Tufts University, and it was there, in the early nineties, where Charney’s fixation on T-shirts started to become a business. His earliest financiers were the mothers of his ex-girlfriends.
‘At a strip bar, you get a cross-section of chicks… You couldn’t ask for a better place to fit a shirt.’
In 1997, Charney moved his operations to L.A., where American Apparel’s headquarters have remained ever since. Back in those days, his wholesale business was situated on the corner of Sante Fe Avenue and the 10 Freeway, a couple of blocks from a strip bar, the Playpen, where Charney conducted fittings. (As he told the New Yorker in 2000, in a quote that may or may not constitute the most vivid poetry of our time, “At a strip bar, you get a cross-section of chicks. You’ve got big chicks, little chicks, big-assed chicks, little-assed chicks, chicks with big tits, and chicks with little tits. You couldn’t ask for a better place to fit a shirt.”) His goal at the time was to create the greatest T-shirt for no more than four bucks wholesale.
That changed in 2003, when American Apparel went retail. The new goal: For American Apparel to become the “Starbucks of T-shirts” while paying its mostly-Hispanic workforce a decent wage and keeping production in the States. As recently as this spring, American Apparel reported that its average sewer makes $12 an hour, a good deal higher than the industry standard. (Then again, some reports have that number as closer to $9 an hour; Piedad Torres, a 59-year-old seamstress who has worked at American Apparel for two years, told the L.A. Times in July she earns half as much today as she did a year ago, when she could regularly take in at least $400 a week.)
The advertisements from the following year — made, like everything else in the vertically-integrated company, in-house — introduced what would become American Apparel’s signature marketing aesthetic: Black text on a white background promising SWEATSHOP FREE T-SHIRTS MADE IN LA; photos with a kind of low-fi, 1970s porno-flick vibe; girls with scrubbed-clean faces, supine and sprawling with that guppy-lip-look, mouth open just so, like she’s contemplating whether or not to pop something inside it. Sometimes the pictures were just butts. Butts in thongs and boy shorts and short-shorts and such. An impressive degree of variety for a single body part, really.
Just in case consumers didn’t pick up the very subtle messaging American Apparel was putting down, Charney solidified his reputation with a now-infamous interview with Jane Magazine, wherein he masturbated eight times in front of reporter Claudine Ko while telling her “masturbation in front of women is underrated.” At the time the article was published, he’d already had serious relationships with three employees. “If I fall in love at work, it’s going to be beautiful and sexual,” he told Ko.
The allure of American Apparel, when it was at its peak, was inextricable from the notoriety of Charney and his carefully-cultivated persona: That of a sexually-liberated, transgressive visionary. (Or an inappropriate, skeevy and possibly-criminal creep, depending on your perception.) By 2008, Charney’s habit of making the rounds in his underwear the American Apparel offices was so widely known it generated a Saturday Night Live sketch. This sometimes worked in American Apparel’s favor; the ads, NSFW though they may be, distinguished a store that essentially existed to sell something that was almost indistinguishable by design. (The perfect T-shirt calls no attention to itself.) In the wake of the Jane article, the president of the California Fashion Association (and a friend of Charney’s) credited the story with “put[ting] him on the map. What is American Apparel without sex? It’s a T-shirt and sweatshirt company.”
Texts from ‘Daddy’ lead to lawsuits from female employees
What is American Apparel with sex, though? A whole lot of lawsuits. In 2005, three former employees filed two separate sexual harassment suits alleging Charney created an unsafe work environment laced with sexual misconduct and language. Two settled. The third, former sales manager Mary Nelson, sued Charney for a “reign of sexual terror” and cited, among other things, his tendency to take meetings while decked out in nothing but “a garment described as a ‘cock sock.’” She claims he made sexual advances toward her before ultimately firing her. Her case went to trial and, in 2008, American Apparel agreed to pay her $1.3 million.
But the agreement would have resulted in a decision that stated Charney “never sexualized, propositioned or made any sexual advances of any nature whatsoever towards Mary Nelson.” Nelson’s attorney agreed to the terms, but Nelson refused to attend the meetings before the judge; the arbitration was aborted and, according to American Apparel, the $1.3 million was never paid.
The following year, another former employee, Sylvia Hsu, claimed she was sexually harassed by a coworker and was subsequently fired. She filed a complaint with the Equal Employment Opportunity Commission; in August 2010, the EEOC found that American Apparel discriminated against not just Hsu but also “women, as a class, on the basis of their female gender, by subjecting them to sexual harassment.”
That July, an anonymous former employee went on Dateline and, in a report that was confirmed by six other former employees, said, “It was understood that Dov was looking for sex almost constantly… He was looking for sex from his employees.” Five more former female employees filed sexual harassment lawsuits against Charney. One of those women said Charney took nude photographs of her in his bedroom; others claimed Charney asked them to have sex against their will. Charney and his lawyers have denied the allegations and written them off as attempts by former employees to shake down the company for cash.
This spring, text messages Charney sent to dozens of female employees were released as part of a motion in response to a defamation lawsuit Charney brought against the company, which had dismissed him months before, in May. Charney allegedly used company devices to send illicit emails and texts to employees that included pornographic videos and photographs, as well as sexually graphic language.
According to court documents, American Apparel “also discovered videos and photographs of Mr. Charney engaged in all manner of sexual behavior with numerous models and employees, which for some incredible reason had been saved by Mr. Charney to the Company’s network server by him with the use of his Company computer.”
And so shopping at American Apparel, like the relationship status between Charney and who knows how many American Apparel employees, is complicated. Are you condoning sexual harassment at the workplace? Or are you supporting American garment workers who would otherwise be replaced by their cheaper counterparts in Bangladesh? Or are you accepting that there is no better place to purchase neon spandex for your fraternity’s Tour de Franzia theme party?
Falling out of fashion
By 2005, the company’s annual revenue was over $200 million. But sales started to slow by the next year; in 2013, American Apparel reported a net loss of $106.3 million. American Apparel, once an arbiter of hipster, coed cool, failed to keep up with the changing proclivities of the average undergrad. Even as American Apparel staples came back in fashion — crop tops, high-waisted shorts, full-bottom bottoms — the overall tone of American Apparel did not.
The branding didn’t, or wouldn’t, evolve to reflect the more sophisticated attitudes of young shoppers. What seemed rebellious and edgy was eventually revealed to be anything but: After all, there is nothing less edgy than the objectification of female bodies, which is a practice as old as art itself and probably even older, nothing less rebellious than selling sex, the most obvious thing in the world you could ever sell.
Schneider’s recent efforts to refocus the conversation around American Apparel away from Charney’s alleged, attention-sucking misconduct and toward the ethically-sound production of her retailer’s “made in the USA” offerings were too little too late. (She also implemented a new sexual harassment policy.)
American Apparel is survived by the fast fashion retailers that helped to expedite its demise: H&M;, Forever 21, and Zara. These stores might have the occasional batch of Holocaust-themed attire and be facing lawsuits of their own, but hey, at least the clothes are cheap.
This piece has been updated to reflect confirmation from Choate that Charney graduated from the school.