American Apparel. A company known for their controversial ads, overpriced basic clothing and, now, possible bankruptcy.
Recently I overheard some fashion students talking about the company going under so I just had to find out if this was true. A quick Google search of the words “American Apparel bankrupt” pulled up some interesting articles — from 2012. Apparently the predictions for which companies would be going under that year weren’t as accurate as they thought.
However, American Apparel is still here and still managing to get people to pay $90 for a pair of “vintage jeans” (ahem, mom jeans). Now, the store definitely has some hits in their line, they have a huge selection of bodysuits — at $30-$62 a pop. But how are they standing strong? The clothes they sell are high quality but they’re basic. A white tee, a pair of jeans, some jelly sandals. They don’t make anything “avant garde” or that goes with the latest trends. It’s truly just the ability to say, “I got this from American Apparel” that makes it worth it.
So is that all? No more to the story, American Apparel is just truly lucky? Apparently not, there is one article on the topic dated February of this year. Finally some new information.
Fashionista.com brought some enlightenment to the company’s real “luck.” Apparently they have been keeping themselves afloat with cash infusions on more than one occasion. Recently it was found out that the company hired outside reconstructing advisers which caused their stock to drop by 32 percent. For those of you wondering how an adviser could cause such a drop, let me explain it this way. These advisers were brought in to help with the company’s outstanding debt. For American Apparel to do this they were admitting they need help. It’s fine to ignore a problem but once you have no choice but to face it some people jump ship.
Even more interesting, the company has had outstanding debt, and been blatantly ignoring it since 2010. Another article from Fashionista.com says the company was $120 million in debt that year. Now with the economy on the fritz and their own cash infusions you could imagine where they are now.
So the question, is will they bounce back to solid ground? Personally, I think not. They won’t go completely extinct, never to be heard from again, but they will continue to gain debt and try to save face. Apparently “Made in America” comes with a bigger price than expected.
