How Youth-Club Chic Burned Bright, Then Faded Away
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WEDNESDAY, SEPTEMBER 1, 2010 The rise and fall of American Apparel How youth-club chic burned bright, American Apparel, the ethical clothing firm then faded away with a controversial CEO, is facing BY IMOGen FOX bankruptcy THE GUARDIAN, LONDON Few high street retailers are able to claim BY AmeLia HILL the rights to an entire look for any stretch THE GUARDIAN, LONDON of time. But between 2007 and last year, US retailer American Apparel did exactly wasn’t having oral sex that — the label was responsible for a with an employee in front trend that could genuinely be termed of a female journalist that the American Apparel look. It now threatens to undo The American Apparel trend Dov Charney, founder of American was instantly recognizable and held Apparel. Nor was it simulating oral a vice-like grip on the under-25s sex with another female member of — male and female. The sexy-geek look staff whom he had ordered to pretend typically comprised of crayon-bright, to masturbate in front of him. The high-waisted skinny jeans worn with 41-year-old’s professional and personal a fuss-free bright T-shirt, a pair of heavy- reputation isn’t even on the line because rimmed glasses and a rebellious pout. at least three female employees have Metallic leggings, bright backpacks and filed sexual harassment lawsuits against skimpy 1980s running shorts completed him (all the cases were settled before the look. reaching trial); nor because he walks By 2008, it was a genuine fashion through his factory in his underpants sensation. At music gigs up and down and conducts meetings wearing just a the country, this exuberant youth-club thong — or a sock. The sock is not, one chic was unavoidable. should add, worn on his foot. Part of the label’s appeal was that it Instead, the fashion empire of this sat outside of fashion’s more prescriptive maverick Canadian entrepreneur — who trends, a sartorial law unto itself. apparently relishes his reputation as a The clothing is logo-free and mostly pervert and a libertine — has gone from unisex, so allowed the wearer to style being the coolest company on the block when it arrived in the UK in 2004 to the a unique look themselves — although, brink of bankruptcy because its auditor, no matter how creative the outfits, Deloitte & Touche, resigned last month they were always somehow distinctly after discovering “material weaknesses” American Apparel. As street-style blogs in the financial controls of the clothing proliferated, the trend was documented company dating back to last year. ad nauseam. For the exhibitionist Charney, In some respects, the brand became whose excesses are the stuff of fashion- a victim of its own success. Even if you industry legend, to be finally humbled ▲ The storefront of an American Apparel branch in lower Manhattan, New York, as seen earlier this month. didn’t subscribe wholeheartedly to the by accounts that are more street corner The stock of the trendy Los Angeles clothing maker and retailer fell to an all-time low of US$0.68 last look, the cheap logo-free jersey T-shirts than Wall Street is, some might think, a Wednesday as it scrambled to overhaul operations, boost sales and repair its faltering image. PHOTO: AFP filled a gap in most wardrobes. But the bit like Al Capone finally being brought ► Dov Charney, chairman and chief executive officer of American Apparel, stands for a portrait in a rest of the high street caught on quickly. to book over tax evasion. But whatever company retail store in New York on July 29. PHOTO: BLOOMBERG Uniqlo began selling cheap colored denim the catalyst, it has led to the unraveling and Gap stepped up its commitment to of an empire. It is a rags to riches — an eccentric, erratic, brilliant figure owns all its retail stores, rather than decent fitting, logo-free T-shirts. — and back to rags again — story that — with a disconcertingly simple concept: franchising them, and Charney — who Then, crucially, fashion overdosed has the fashion world in its thrall. to make humble T-shirts, jogging pants is obsessive about his brand, throwing on the look. Although there remains a Known for its cotton basics and sweatshirts seem exciting. tantrums about everything from stock hardcore band of youths committed to — including the infamous Y-fronts Charney cut his teeth in retail allocation to necklines — still holds, wearing their American Apparel brights so beloved of the founder himself while still at high school in Montreal, for the time being, a 53 percent stake. with ripped sheer tights, the look is — shares of the Los Angeles-based importing Hanes and Fruit of the Loom He explicitly resists being labeled as fading as fast as summer. Fashion is now company touched US$14 in 2008. That T-shirts from the US for his Canadian a manufacturing tycoon with a heart much more enamored with minimalism, same year, the London-based Guardian friends. He claims to have shipped of gold, or even a Jekyll and Hyde, camel and grown-up trends. Youthful newspaper named American Apparel around 10,000 shirts at a time in a rented happily admitting that he acts not for bright leggings are very much on the label of the year. Last year, Charney truck before, in 1990, dropping out of moral reasons but because it is a better sidelines, along with the company that was a finalist for Time’s 100 most Tufts University to pursue his business business strategy. made them its own. influential people in the world. full-time. Borrowing US$10,000 from his So what has gone wrong? Yet on Wednesday, his company’s father Morris Charney, an architect, the Fashionistas say the brand is still shares were trading at an all-time low 21-year-old moved to south California strong. “Just two years ago, American associate editor, has a theory. “I’ve breathtaking,” McCabe says. “That puts a retail analysts Planet Retail. Yet he of US$0.68 — a drop of almost 50 and began manufacturing T-shirts under Apparel was the ultra-fashionable shop bought lots from American Apparel lot of pressure on what their USP was in admits that the severity of Deloitte’s percent in less than a month. American the American Apparel brand. that you found in every cool location, in the past, but now it’s mainly their the first place, which was to be a trendy report, and the fact it then resigned as Apparel admits it now has debts of Six years later, the company was from Covent Garden to Oxford Street underpants I go back for. They do a niche brand. In addition, I feel the brand auditors of the clothing company, is a US$120 million and is losing money at unable to cover its debts and went to Shoreditch [all in London],” says lovely Y-front,” he says. “My problem has stood still. I see exactly the same “fairly cataclysmic” sign that, at best, a rate of nearly US$30 million a year. into administration. Charney, though, Melanie Rickey, Grazia’s fashion with the brand is that it’s a one-trick things in the Oxford Street store today leaves the business with only a “vague (As of press time the stock was trading was undaunted, and in 2003 founded editor-at-large. “It became very big, offering: You can’t see where they can as I did when I walked into their flagship form of future.” at US$0.76.) American Apparel in two stores in very quickly. Everybody was wearing it, take it. Calvin Klein has built an empire LA branch the week it launched.” “It sounds as if someone has blown With sales down by 16 percent in downtown Los Angeles, employing and I mean everyone: high-fashion kids, on pants, but he recreates his image The brand was once a neat proposi- a whistle about something less than its 279 shops globally, the company 1,300 people. Within a year, he was clubbers, geeks and gay kids across the and updates the design.” tion with a sexy, preppy image that hit palatable that’s going on,” Roberts whose clothes were worn by the coolest named Ernst & Young’s entrepreneur of world. It crossed all genres and tribes.” The other problem is Charney the fashion trends head-on and whose says. “That’s not to say anything illegal kids across the world is now at risk of the year and Apparel magazine’s man Interestingly, Rickey insists the himself. “He comes over as such a ethics were exactly right, McCabe adds. is taking place, but someone could breaching the terms of an US$80 million of the year. The legend was born. brand has not lost its edge: “No one sleazeball,” Johnston says. “Because Then came the recession, and the com- be transgressing best practice or loan provided by British company Lion The confusing thing about Charney does what they do in the way they do their campaigns are slightly grubby, pany found itself trapped in the limbo minimum requirements.” Capital, in March last year — a loan is his combination of out-of-control it: not Zara, not Topshop, and not H&M and he’s more than slightly grubby, it of the high end of the middle market. Charney has pinned the blame on a advanced to rescue it from another carnality and progressive social or Next,” she says. “I will personally be all conspires to be rather unappealing. “Why pay US$47 for a plain white T- police raid on its Los Angeles factory last financial crisis.