American Apparel is the largest clothing manufacturer in the United States. It is a vertically integrated clothing manufacturer, wholesaler, and retailer that also performs its own design, advertising, and marketing. It is best-known for making basic cotton knitwear such as T-shirts and underwear, but in recent years it has expandedï¿½to include leggings, leotards, tank tops, vintage clothing, dresses, pants, denim, nail polish, bedding and accessories for men, women, children, babies and dogs.
American Apparel was founded in 1989 by Canadian Dov Charney, who had a long history with T-shirts and a fascination with American culture. It was during Charney's freshman year at Tufts University that the company took on the name "American Apparel" and began to experiment with screenprinting, importation and other parts of the apparel business. In 1997 after a variety of iterations, including a period of manufacturing in South Carolina, the company moved to Los Angeles. Charney began to sub-contract sewing with Sam Lim who, at the time, had a shop with 50 workers under the Interstate 10 freeway in east LA. Months later the two became partners. In 2000 American Apparel moved into its current factory in downtown Los Angeles where it continued to grow primarily as a wholesale business, selling blank T-shirts to screenprinters, uniform companies and fashion brands.
After its success as a wholesale brand, the company moved into the retail market. The company was ranked 308th in Inc.'s 2005 list of the 500 fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over US$211 million.
In late 2006 American Apparel announced a reverse merger, in which Endeavor Acquisition Corp., a special-purpose acquisition company founded in July 2005, bought the company for $360 million. The merger closed in December 2007, at which point American Apparel became a publicly traded company. As a result, Charney became the President and Chief Executive Officer of the publicly traded company known as American Apparel, Inc. He remained the majority shareholder.
It is also one of the few clothing companies exporting "Made in the USA" goods and in 2007 sold about $125 million dollars of domestically manufactured clothing outside of America. The company also promotes a number of progressive policies including immigrant rights and labor policies the company dubs "sweatshop free."
American Apparel bases its manufacturing in an 800,000-square-foot (74,000 m2) factory in downtown Los Angeles, California. The company also owns and operates its own fabric dye house, garment dye house, and knitting facility, all based in Los Angeles. American Apparel has decided not to outsource its labor, paying factory workers an average of over $12 dollars an hour. Garment workers for similar American companies in China earn approximately 40 cents per hour. It claims to have the 'highest earning apparel workers in the world'.
The company uses "team manufacturing" which pools the strongest workers towards priority orders. Each team functions autonomously and determines its own daily production schedule, giving them control over their own hourly wages. After its implementation, garment production tripled and required a less than 20% staff increase. The factory claims to have the capacity to produce 1 million shirts per week and manufacture 275,000 pieces a day. According to The New York Times it is the largest single garment factory in the United States and employs over 4,000 people across two buildings.
A banner on top of the downtown factory states "A American Apparel is a vertically-integrated company. The integration extends to 260+ retail storefronts, all of which are owned by the company. By integrating all aspects of production and avoiding outsourcing, the company achieves a fast turn-around time from design concept to finished product. On Charlie Rose, founder Charney discussed the process of developing new merchandise in their unique retail system, saying that it took just a "couple of weeks" for a bathing suit to go from idea to the retail floor. He claimed that a garment could be designed on Monday and be sold in London the following week American Apparel is an Industrial Revolution.
The company's expansion into retail was the fastest retail roll out in American history. In 2003 American Apparel opened company stores in Los Angeles, Montreal, and New York to nearly $80 million dollars in sales. As of 2008 the company has more than 200 stores worldwide and continues retail growth with new stores in the United States, Israel, Italy, Japan, South Korea, the Netherlands, Switzerland, China, Germany, Austria, Canada, France, Sweden, Spain, Mexico, United Kingdom, Ireland, Brazil, and Australia. Stores are planned or under development for Belgium, Iceland, China, and Hawaii.
American Apparel retail stores are marketed and designed individually rather than homogeneously. Store designs are sparse and typically cost between $100,000 and $400,000 to develop. The company tends to reject midtown, high rent locations and generally avoids in-mall stores. The stores are often hubs for urban renewal since the company looks for low-rent but high traffic locations like Houston, Little Tokyo, New Orleans, college towns and most recently across from the Apollo Theater on 125th in Harlem. In some stores, the decor features Penthouse covers from 1970s and 1980sï¿½a style that has been controversial. When scouting for locations, it considers urban areas that can be revitalized. After opening on Southwest Stark Street in Portland, Oregon American Apparel was joined by a vintage clothing store, sushi restaurant, shoe shop and modern-styled hotel. In some cases, the company sublets parts of retail locations to other businesses of the same demographic, bringing additional retailers to previously unoccupied space. The bulk of American Apparel retail venues are in New York City and California, mainly San Francisco and Los Angeles.
AmericanApparel.net is the company's e-commerce sales hub. It carries an online inventory of roughly 250,000 SKUs and receives 1.5 million visitors per month. Online sales grew from $13.3 million in 2006 to $29.3 million in 2007 to roughly $40 million in 2009. The company site runs on the Yahoo Stores platform and is included in the Internet Retailer 500 Index.
In late 2007, American Apparel opened a retail location for vintage clothing called California Select in Echo Park, a district of Los Angeles Shortly afterward; the company began selling vintage clothing through an eBay store of the same name. In 2008, the company was named "Retailer of the Year", following Calvin Klein and Oscar de la Renta.
American Apparel began by selling high-quality t-shirts to screen-printers and boutiques in 1990 under the American HEAVY label. Although it has made its transition into a primarily retail brand, the company is still one of the largest wholesalers in the country. American Apparel shirts are used as band merchandise and concert t-shirts for the bands, among many others, Van Halen, Wilco, Death Cab for Cutie, Vampire Weekend, Metric, and Flogging Molly as well as websites like Threadless, Busted Tees, Print Liberation and the I Can Has Cheezburger? store as the t-shirts are said to fit true to size. All shirts sold on Shirt.Woot are printed on American Apparel tees. People for the Ethical Treatment of Animals, the animal rights advocacy group, prints its merchandise on American Apparel clothes because they are made domestically and animal-free.