Heard the latest fashion scandal? American Apparel has officially filed for Chapter 11 bankruptcy.
On October 5th, the clothing company sent out an e-mail explaining the state of the company. Addressing the “rumor” that the company was hitting some tough financial times, they explained that they have no plans to close down shop. American Apparel also assured customers that they “will emerge as a stronger, more vibrant company” and will “continue [to produce] fashion-forward, iconic apparel”.
AA has had some rocky patches throughout the years and this is the biggest splash they’ve made in the news in a while. Is bad press better than no press? Will this be what helps them in the long run, drawing attention to a floundering company in order to drum up funds?
The turnaround plan that AA introduced earlier in the year can also start working to save the company, now that debt has been reduced. Business Insider reports that “the turnaround plan involved the creation of a new fall collection, additions to the executive team, and approximately $30 million in cost-cutting initiatives.” The company also closed underperforming stores and cut jobs.
Many have mixed opinions on AA. You’ve probably seen their raunchy, questionable advertisements on billboards (or on the news). Maybe the company shouldn’t rely so much on shock value, because it doesn’t appear to be working all that well. However, the company likes to flaunt that the products it offers are “Made in the U.S.A.” and sweatshop-free. It is so hard to find companies that sell products without relying on sweatshop labor.
However, the company got the worst parts of its reputation from Dov Charney, ex-chief executive officer. He has gathered a fair number of lawsuits, which Huffington Post reports on: “Since founding the company in 1989, Charney has become a magnet for lawsuits alleging malicious behavior, sexual assault and harassment.” Apparently he has been sued by at least five women in lawsuits for sexual harassment and assault. While “Charney’s lawyer accused these lawsuits’ plaintiffs of seeking to ‘use publicity as leverage’ [and] pursuing ‘exorbitant’ financial claims”, things like this tend to leave a bad taste in your mouth, settled or not.
Where exactly does one draw the line? What is “too far”? Are shoppers comfortable knowing this information and shopping at this store? The underbelly of the fashion industry isn’t as glamorous as one may think. It’s full of lawsuits, poor treatment of employees, and all sorts of unpleasant things. However, when so many companies are guilty of this, where does one get their clothes? One must also consider the college budget: if clothes are cheap to buy, they may have come from a sweatshop overseas. However, shelling out money for clothing isn’t really an option. Should we feel guilty?
How do you feel about American Apparel? Do they deserve this second chance? Can you shop at stores even if their companies may be up to no good? Let me know by e-mailing [email protected].
-Sonia
