Farewell – hopefully – to American Apparel

americanapparelAmerican Apparel’s brand promise was a unique mix of “clothes made in the USA” and porn. The company alleged it manufactured things in a responsible way. (Mass layoffs earlier this year of the illegal workers who made their product in the USA did away with that one.) AmAp’s approach to marketing is best described as an NC17 version of “nothing comes between me and my Calvin’s.”

For most businesses this would have just been another horrid example of sex sells. For AmAp it seems to have been a reflection of CEO Dov Charney’s “issues.” Charney, who took most of the pictures of company employees used in the ads, was the defendant in so many sex-harassment law suits that you couldn’t keep track of them.The wonderful practices didn’t stop there – no surprise. AmAp was also accused of firing employees who weren’t attractive enough and, Gawker reported that,

Charney "made store managers across the country take group photos of their employees so that he could personally judge people based on looks. He is tightening the AA ‘aesthetic,’ and anyone that he deems not good-looking enough to work there, is encouraged to be fired."

Happily Charney’s management style seems to have come back and bitten him in the ass. Today the Times reported that the company’s woes continued as it raised "substantial" doubt about its ability to continue as a going concern and warned it could breach a loan covenant, sending its shares down 22 percent to a lifetime low. This follows a Federal inquiry into AmAp finances which was spurred when the company’s auditor quit after warning of problems with the company’s financial reporting and the reliability of the company’s financial statement for ‘09.

BTW, Charney is the company’s largest shareholder. Huzzah. Justice, oddly enough, is served.


Brand fail? American Apparel employed 1,800 not-so-American workers

AmApAd American Apparel – which runs “the largest garment factory in the United States, at a time when most apparel production has moved offshore” – has been employing 1,800 people “not authorized” to work in the United States.

The U.S. Immigration and Customs Enforcement agency found that some 1,600 current employees at American Apparel’s Los Angeles factories appeared to have gained employment due to "suspect and not valid" eligibility documentation.

Perhaps this explains CEO Dov Charney’s support of immigration reform? In fairness to American Apparel, the company gained no financial advantage using the illegal workers. All workers are paid above minimum wage, receive subsidized health care and meals, and can participate in free English classes. The company has also long been on record for complaining how easy it is to fake the papers needed for employment.

Also in fairness, I would be remiss in not mentioning that Mr. Charney has more recently been in the news because he is being sued by Woody Allen over the use of an image from Annie Hall. The irony of these two “personal boundary impaired” men going to court is wonderful. Mr. Allen of course married his step daughter a few years ago. Mr. Charney, whose brand specializes in near-pornographic advertising, is frequently the photographer for these campaigns which use employees as models.

Do not accuse of Mr. Charney of asking more of his employees than of himself, let it be noted that Mr. Charney has publicly defended his practice of walking around his company wearing only American Apparel-made underwear. "There is no evidence to say that you can’t walk around in your underwear all day anywhere in the United States of America."

Given all that you may not find it surprising that Mr. C has been the subject of four sexual-harassment lawsuits brought by former employees, though none have been proved in court. This however is surprising: “In 2004, an article in the now defunct US women’s magazine Jane accused Mr Charney of masturbating in front of the reporter. He never denied the allegation, saying it was consensual.