It’s a place where hipsters go to talk all about the unknown indie music they discovered before anyone else, and make fun of people who shop at Macy’s. This is the store where these same hipsters spend obscene amounts of money on various v-necks in white and heather gray to go perfectly with their ultra-skinny jeans and old-school sneakers. It is now a place that is sliding deeper and deeper into debt and quickly going bankrupt, and might not even last through the new year.
That’s right, all you effortlessly cool kids, your second home, American Apparel, where you find peace and simple clothing, the only store you’ll shop at other than vintage and Goodwill is going bankrupt, and, this time we have proof.
There has been a lot of talk over the last few years of American Apparel’s huge $91 million debt. Given that they price a simple white v-neck that is targeted to minimum wage-making teenagers in over $30 in this economy is the worst business scheme out there.
Now, before you, news reading hipsters, get your asymmetrical side bang haircut ruffled and say, “I read an article in early October saying that AA was saved from bankruptcy, you’re wrong, you midtown (hipster slang: uncultured or unhip) loser,” calm down and note that a few weeks ago, the Apparel company issued their second quarter results that proved to be less than ok.
According to WWD.com (Women’s Wear Daily), the company has lost over $14.5 million, and “may not be able to have sufficient liquidity to sustain operations for the next 12 months.” Originally, AA was saved from bankruptcy when the British firm Lion Capital changed the terms of their lending agreement. The new agreement required AA to make a $20 million profit before taxes by Jan 31, 2011, and must earn $80 million by September 2013. This is proving to be no easy feat as the clothing company is still sinking further into debt, losing tons of money on merchandise.
American Apparel’s CEO Dov Charney told WWD, “Retail is hard right now. I’m not alone in this. You have to work for every dollar, you have to work on the merchandise, make sure the product mix is perfect and the allocation is right. It’s a tough market right now.” Well, perhaps you should start thinking about lowering some of your prices on hoodies and t-shirts, Mr. Charney. That may just save your business. You don’t see Forever 21 or Target having money problems, do you?
I guess we have to give AA some credit for not outsourcing their labor, making children in third world countries work for pennies an hour. They actually run their factory in Los Angeles, California and, according to the New York Post, a garment worker makes about $12 an hour.
Hopefully, you hipsters come upon some money and drop a few stacks on t-shirts, spandex, and hoodies this year to help save this ‘non-sweatshop’-endorsing clothing company, or heaven forbid you’ll soon be wearing Hanes’ v-necks.