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For years, the company has been one of the few large clothing manufacturers to produce entirely within America. While certainly admirable, this sticking point has cost the company large sums of money over the years. Now, as American Apparel faces their tenth straight quarterly loss, there may be escalating pressure to move product construction overseas.
“There’s been a lot of discussion about the importance of American companies employing American workers. But when it comes to fashion items, that doesn’t necessarily resonate with shoppers,” said Anthony Dukes, a business professor at the University of Southern California who has studied the retail industry. “There’s not a lot of evidence to suggest that ‘made in America’ is a great model.”
Still, brand CEO Don Charney isn’t keen on it.
“I want to prove myself,” he recently stated in an interview, “and I want to prove ‘made in America’ is a smart business.”
He did add, however, “To say that I’m never going to import from overseas would be unreasonable. At this time our business concept is to make everything here. But I wouldn’t rule anything out.”
The company has been forced to weather numerous battles in recent years, with sexual harassment lawsuits, illegal worker issues, and brand buy-outs. Harried by their quarterly losses, analysts are speculating that the move to overseas production could provide a boon to the ailing company. What effect that would have on the quality of the product, and more concerning, the Los Angeles community, remains unseen.
“American Apparel occupies an important niche in the job market in Los Angeles,” said Sung Won Sohn, economics professor at Cal State Channel Islands. “Some immigrants qualify for high-paying jobs, and others qualify for only minimum-wage jobs. They provide employment to a lot of immigrants who don’t qualify for the high-paying jobs.
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