American Apparel is back in business after being bankrupt

by Gabriela Arteaga (Lifestyle Editor) – 10/04/17

Sam Abajian and Daniel Streaty modeling a representation of how American Apparel ads typically are.

American Apparel is back four months after closing over one-hundred stores, plus filing bankruptcy; the resurrection is thanks to Gildan Activewear Inc., who bought the brand for $88 million. On August 10, American Apparel secretly opened their website for consumer business, and word quickly spread, with the official relaunch of their site occurring on August 14.

Sabina Weber and Silvia Mazzuchelli, Vice Presidents of AA, had four months to bring back this company from the dead. “Throughout the years, [American Apparel]… pretty much never made money,” explains Mazzuchelli. “Even at the maximum level with $600 million of revenue, it still had no profit, so that tells you that something behind the operations of the business was just not right, because with that amount of revenue, we should be able to make operating income and profit.”

The brand was very popular mid-early 2000s for their alternative basic pieces and provocative commercials, yet it still filed for bankruptcy twice in a period of two years, had constant struggling sales, and bad PR regarding sexual harassment allegations on founder Dev Charney.

Weber stated that there won’t be many changes in AA, but customers can expect lower prices on the same quantity and a variation in size.

“It’s nice to know that American Apparel is having a variety of sizes in their clothing and actually lowering their prices since that’s probably why they lost so many customers,” claims senior Genesis Diaz.  AA is also changing distribution in their company. Glenn Chamandy, chief executive of Gildan, told Business of Fashion, “We’re going to focus on our direct to consumer. We’re going to expand internationally. We think that this could be quite big as we go forward.”

Many companies in the past have also gone bankrupt and jump back up. Apple is one of the most valuable companies in the world that was on edge of bankruptcy. Twenty years ago the company was losing one billion a year, but all that changed once Steve Jobs launched sweeping products like the iMac and iPod.

As of now, American Apparel hasn’t spoken out on whether they’re thinking about reopening stores throughout Los Angeles but will be selling through their website.