...Company’s Background American Apparel is a clothing manufacturer, wholesaler, and retailer in the United State Found in1998 by Dov Charney under the name “Old American Apparel” The company started out as a wholesale business selling undecorated t-shirts, and after its successful, its expand to retailing business, open its first store in L.A in 2003, and expand more to Canada, Europe and Asia. And also h ave its own online retail store. It currently has more than 270 retailer stores in 20 countries. Its retail business offer products for men, women, children, babies and even household pet, targeting at all age. Its wholesale business consists of producing from undecorated apparel to military uniform. And company oftenly promote itself as “Made in the USA" and “Sweatshop Free” product. Company Strategy Vertical integration: In the past decades, it has become the norm amongst the majority of US apparel co mpanies to outsource their manufacturing operations abroad to third vendors. But American apparel ha s kept it local. it had made both backward and forward vertical integration as a central part of its strateg y. It bases its operation and manufacturing in this building 800,000 sq. ft. factory in downtown L.A. In t his building it does fabric cutting, sewing, knitting, dyeing , as well as distribution and wholesale operat ion. And it also does its own clothing design, marketing, and advertising, which often using its employee s as photographers and clothing models. As the...
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...sub-issues that are relevant to the case. * Who are the key people and/or groups that you need to consider in solving the problem/opportunity?The decision maker is Dov CharneyMain Problem: American apparel is struggling to find synchronization between their corporate social responsibilities including pro labour practices, domestic manufacturing suppliers, sweat shop free policies, environmentally friendly materials and their increasingly controversial advertising strategies. The issue is important because the company is facing a lot of criticism and controversies and are also at the urge of losing investors. The problem should be solved as soon as possible to keep the company running with a profit.Sub issues: * Bad marketing strategy, took sexual appeal really far * $250 million sexual harassment lawsuit * Challenges repaying debts * On the brink of a collapseKey people: Dov charney, management, stakeholders( customers, investors) | Atiya khan-American apparel B. Key Facts of the Case (relevant facts only, no analysis) - 10 Marks | * Provide the relevant background that led to the problem/opportunity(s). * Provide any additional case information that provides context to the problem or opportunity. * 1998 American apparel was launched in LA, CA * Unisex manufacturer * Best known for knitwear * 7 story pink warehouse * Targeted 20+ young adult * Did not push people to idolize photo shopped models * Used real...
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...American Apparel American Apparel, founded in 1997, began its business strategy differently than most other companies. The founder, Dov Charney, believed in the philosophy of being a vertically integrated company. This means they manufacture, produce and sell their own products. Sales were slowly decreasing over the years because of poor fiscal management. To remain the largest U.S. apparel store they needed to tighten the reins on their financial management. Synopsis of the Case American Apparel is the largest clothing manufacturer located in the U.S that is sweat-shop free. They are infamous for selling their sexually explicit t-shirts as well as other clothing. All American Apparel operations are done within their facilities located in downtown LA. They enjoy high retention rates through generous benefits packages and other incentives. American Apparel strives to grow to be the most recognized clothing line in the U.S. by properly managing their finances. Relevant Factual Information about the Problem or Decision the Organization Faced American Apparel offers a comfortable environment for their employees. They offer incentives such as health care for employees and families, free parking, bus passes, low auto insurance, health and wellness centers, subsidized lunches and training to improve their job and management skills (Grant, 2010, p.259). Charney realizes that the benefits he offers are costly but they ensure continuity amongst his employees. Since...
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...AMERICAN APPAREL REPORT ANALYSIS 13/12/2011 [->0] SUBMITTED BY: JOEL CHERIAN – SMBA 11081 American Apparel COMPANY PROFILE :- American Apparel is one of the quickest growing companies in popularity among college aged shoppers. They are a very fresh, and very liberal corporation with a young and talkative CEO- David Charney . It is seemingly the “perfect” company- set on high wages and benefits for workers, using the least environmentally damaging chemicals and processes, and offering great products at a reasonable price. American Apparel is the most passionate and innovative wholesale blank T-shirt manufacturer and distributor in the world. It is committed to leveraging art, design, and technology to produce garments of the highest quality, while pioneering industry standards of social responsibility in the workplace. The major goal is to seek profits through innovation not exploitation. American Aparel are advancing a hyper capitalist-socialist business fusion. By relentlessly pursuing efficiencies in management and production, we aim to demonstrate that the use of exploitative labor tactics is not only unnecessary...
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...today’s market economy, American Apparel places a premium on differentiating itself from the competition by creating a unique brand image based on a hip, comfortable line of clothing, and a “Made in the USA” slogan. Founded in California, American Apparel is a company that wants its customers to be comfortable in its merchandise, as well as in their own skin above all else. American Apparel offers clothing and accessories for men, women, children, and even pets. The vertically-integrated company prides itself on providing value to its customers, making them loyal shoppers of their brand. With over 150 retail store locations nationwide and over a dozen more in countries across the globe, American Apparel has earned its reputation by offering fashionable products of high quality at affordable prices. SEGMENTATION The fashion apparel retail market can be segmented using the following factors: geographic, demographic, and psychographic. Before entering the market, American Apparel studied these factors to create segments. In terms of geographic factors, American Apparel could have alternatively chosen to target include those living in rural small towns, far away from a major metropolis, or in the middle of a farming community. While American Apparel operates over 150 stores in the United States alone, there are less than 24 retail outlets located in the Midwest[1]. As far as demographic factors are concerned, American Apparel mainly steers away from tweens and...
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...| Canadian Apparel Federation | Exploratory Research Assignment | Owner June 2, 2012 | Introduction The Canadian Apparel Federation is facing numerous challenges as the apparel industry is very competitive and consumer tastes and preferences are constantly changing. Our study will present some of the major trends developing in the apparel industry and what companies can do to capitalize on the market and distinguish themselves from the competitors. Research Objectives The purpose of study is to identify what a company must do to separate themselves from their competition and how to best retain and attract customers. We will examine what actions are required by companies to become successful in the market. We will compare what qualities and traits successful companies possessed which provided them with a competitive advantage in the marketplace and kept their customers satisfied. We will compare three companies; Lululemon, American Apparel, and Roots Canada and report on what separates them from their competition and mistakes they have made in the past. Research Method Our research consisted primarily of exploratory research which will focus on the industry’s background to help us determine key industry trends, customer preferences and keys for success. We will collect background information from articles, industry data, companies internal data, competitors data and consumers opinions which will be gathered from online social media. Secondary data will...
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...American Apparel: Exploitation to the Highest Elevation Amanda Data Lifestyle and marketing through social media platforms, such as Instagram, has increased company sales exponentially. Well-known, “Made in the USA” brand, American Apparel has continually sought after its minimalistic customers through heavy media presence. Clay Shirky’s “Here Comes Everybody” suggests that social media democratization has secured a “unified freedom of speech” in a society that encourages the publication of anyone that wants to have a voice in these social media outlets (79). American Apparel’s Instagram presence has created a feed of the brand’s current aesthetic, showing no evidence of the risqué and inappropriate advertisements from past seasons – accounts that the company has been chastised for on numerous occasions. In a society where freedom of speech unites social media users, it also has consolidated a profile of companies where others have access to preconceived ideas of them. While American Apparel has attempted to use Instagram in effort to retract their resentful brand image from the past, it appears that they have misused the security of “unified freedom of speech” to the own disadvantage, resulting in wallowing debts and a cooperate image that is misrepresented by their picturesque Instagram. Author of The Tipping Point, Malcolm Gladwell focuses on the idea of spreading thoughts, ideas, and relationships through one single people that enables themselves to provide this sort...
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...Dov Charney is the CEO and founder of American Apparel. He is responsible for opening the company’s first retail store in 2003. There are about 280 stores in about 20 countries. Charney owns 57% of the company and is responsible for the double-digit loss American Apparel experienced this year (Wall Street Journal). Dov Charney has loss representation from Deloitte & Touche LLC. from flawed financial statements and lost 1,500 factory workers who were illegal immigrants (The Gazette). Dov Charney has designed an organizational culture that may not be appealing to its shareholders. He argues that American Apparel is a “freewheeling creative environment; it’s not inappropriate to use foul language” (Dateline). This may be described to some as a ‘hostile work environment.’ Although the law in California states that it is permissible to use inappropriate language in a creative work environment, American Apparel employees have reported to be offended. Charney says he uses the “language of the street” at work and “it can get pretty salty” (BusinessWeek). Other company policies include drinks on the job for those who are working late and promoting a “highly sexual atmosphere”. He promotes dating within the organization and actively participates in relationships with his subordinates. He claims they have been consensual. Employees have noticed bonuses and incentives for those who have been in a relationship with him (Dateline). These actions can cause employees to feel as...
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...American Apparel Clothing Allowance Policy Spring 2014 Seasonal Clothing Allowance Policy A new seasonal clothing allowance structure has been approved for the Spring! Employees will now choose their allowance from a select list of styles (see attached storyboard). First Season: March 1st — August 31st Second Season: September 1st — February 28th Seasonal Clothing Allowance is for American Apparel Retail employees only. The Seasonal Clothing Allowance categories will be the same for both Regular Retail and Outlet Store Employees. New hires will receive their clothing allowance from the Flea Market. If your city does not have a Flea Market, they will be ordered from Candy Wheeler. Position Summary The seasonal allowance will still be separated by position, and the retail value will remain the same (i.e. Sales Team will receive $180 worth of clothing, at retail price). Here is the position summary: District Management Store Manager, Assistant Manager, Backstock Coordinator Keyholders, Merchandisers, Assistant Backstock Coordinator Sales Team, Cashiers, Backstock Guidelines & Instructions Print the attached storyboard All clothing/accessories have been separated alphabetically by Category and Gender. Female Employees Category A – Tops Category B – Tops Category C – Bodysuits Category D – Bottoms Category E – Bottoms Category F – Dresses/Rompers Category G – Hair Accessories Category H – Jewelry Category I – Belts Category J – Hosiery Male Employees...
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...Information Management Systems The Second Life Strategy of American Apparel 1. This was not a failure for American Apparel because this was a learning experience. This learning experience helped them identify with their customer base. This helped them start up the MTV’s virtual Lower East Side. This was a great benfit for the company. 2. This has supported American Apparels business strategy greatly. It has allowed American Apparel to come to the market, helped sales and building customer relationships. 3. The second life store helped American Apparel’s business strategy by providing to the market. This helped American Apparel understand their consumer market and to learn from their consumers. 4. I think it’s really cool. I would play that game. I also feel like it’s a lot like Sims the game. The only difference you do not have to pay for clothes and you do not fly. I would play this game but I do not like spending my money something that is not real. 5. Yes I do think its very effective. Many companies do game advertising. When a person plays any kind of sport game there is usually advertising. This is a very effective way of advertising because it’s cheap and it still gets the word out of what that company is doing. 6. Yes I do beieave that this increases customer loyalty. People can go online and look at the clothes on their avatar then go to the store and buy the same clothes. This keeps customers to keep coming back. The avatar represents the...
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... The Good of Apparel; (Chapter 7) 1) American Apparel is a multinational corporation at the crossroads of profitability and nationalism. The clothing industry is one of the biggest manufacturing sectors with respect to the exploitation of human rights. American Apparel has made numerous landmark moves to get away from the negative connotations of the clothing industry. There are 3 main ways that American Apparel has tried to combat these negative associations; utilization of Vertical Integration, Sweat Shop Free and 100% Made in USA. Vertical Integration allows for AA to know exactly who makes, and how they make it for every input in the manufacturing process. This means that the business is consolidated and every decision comes from the same place allowing for autonomy across business segments. “In the past decades, it has become the norm amongst the majority of US apparel companies to move their manufacturing operations abroad to third party vendors. American Apparel has kept it local. We are vertically integrated, and operate the largest apparel manufacturing facility in North America, right in Downtown LA. Though it's not the easy road to travel, this has always been our business model.” ("Vertical Integration") As outlined on the website, American Apparel prides itself on not leveraging sweat-shops in efforts of higher profit margins. Instead of exploiting a poor country for its low cost labour, American Apparel utilizes thousands of American workers...
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...American- Apparel is an American based clothing store, whose main brand runs on the “Made in the USA” clothing tag which indicates sweat-shop free. Unfortunately, the brand has been financially unsuccessful with a 13.5 million interest to pay off in 2013, with Standpoint Research founder, Ronnie Moas, who asses ethical means of brands, recommending the company to manufacture 25 percent of their clothing outside of the country (Li et al.). This example of American Apparel shows how this method of making clothing in the United States is impractical and attainable due to lack of skilled and interested workers. More so, countries such as China, Bangladesh, or Cambodia, have an economic reliance on fast fashion businesses, and without such many would be unemployed. An Economist article titled, “Made in China,” explains the reasons of why China’s economy has grown, claiming “… it (China) is clinging on to low-cost manufacturing, even as it goes upmarket to exploit higher-value activities. Its share of global clothing exports has actually risen, from 42.6% in 2011 to 43.1% in 2013” (Made). These embedded references displays a cause and effect situation, if fast brands choose to move their factories to places such as the United States, London, or Sweden and follow the image of companies such as American Apparel this leads to mass unemployment that not only affects...
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...Anita’s Apparel Case Study Nordstrom developed a number of systems that was designed to support “The Nordstrom Way”. I will evaluate the company’s compensation programs, customer service satisfaction and employee empowerment systems. I will then provide suggestions for Anita Lamont about compensating her employees. Nordstrom’s compensation management system contributes to the overall success of the organization in several ways. Nordstrom’s philosophy is to offer the customers the best service, selection, quality and value. They enforce that all employees regardless of the level is the customer service department. Nordstrom has an inverted pyramid of which they put their customers at the top of the chart followed by salespeople and so on and so forth. The company promotes from within and every person starts as a salesperson. Nordstrom’s compensation system for their salespersons’ salaries are commissioned based, reflecting a commitment to pay people for their performance. Commission based salaries allow salespeople to earn considerably more money than the industry average. Salespeople also receive bonuses and rewards for doing an especially outstanding job. In order to retain their competitive advantage of superior customer service in the highly competitive retailing market, they designed an evaluation/compensation system that had the following objectives: (1) to support its high-service strategy and (2 to motivate its sales employees. They tried to evaluate and...
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...INTRODUCTION The rapidly changing culture, politics and economics of modern life deeply affect the industrial environment, especially consumer industries such as textiles and clothing (Lowson, King & Hunter 1999). One of the impacts is that the contemporary North American and European textile and apparel industries suffer immense competition from foreign producers (Yan & Fiorito 2002). As early as the mid-1980s, imports were estimated to account for close to 50% of consumption (Lowson, King & Hunter 1999). As most imported textiles are produced with very low labor expense, huge amounts of inexpensive products can be supplied in the domestic market. Considering this situation, competitiveness in cost and quality continue to be key issues for textile manufacturers. In order to significantly reduce time and cost in the supply chain, the industry needed to become more focused on consumers by developing a supply chain management process that would be demand driven and production that would be synchronized to replenish product at the consumer's pull rate (Lovejoy 2001). Today, consumers desire to personalize the style, fit and color of the clothes they buy, and require high-quality customized products at low prices with faster delivery (Lee & Chen 1999). New manufacturing technologies such as 3D body scanners, CAD/CAM systems, and digital textile printers have played a key role in increasing the effectiveness, flexibility, agility, and precision of production. ...
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...Erin Jones MGMT 451W: Final Paper http://business-ethics.com/2011/03/15/0852-american-apparel-and-the-ethics-of-a-sexually-charged-workplace/ For years, Dov Charney, chairman and CEO of American Apparel, a rather well known clothing manufacturer, has had many cases of sexual harassment brought against him. Since as early as 2006, numerous female American Apparel employees have come forward, claiming that they had in some way been sexually violated by Charney. There was one instance in which Charney and the directors of the company were sued by a former American Apparel employee for 250 million dollars, where she claimed that she had been forced to perform sexual acts for Charney while still a minor and working for the company. Also, in March of the current year, two suits were even brought against Charney in the same month; one in which a 19 year old, former American Apparel sales associate alleged that she was sexually assaulted while interviewing with Charney for a new modeling position. In a corporate scandal such as this, many of the class concepts that were covered throughout the semester can be applied. From the domain of individual ethical decision making, we were introduced to several psychological roadblocks that individuals sometimes use to excuse or condone their unethical behaviors. Dov Charney exhibits a prime example of a certain psychological roadblock when he explains his view as to why he thinks consensual sexual relationships within the workplace...
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