Tags: american apparel | closing | underperforming | stores

American Apparel Closing Stores in an Effort to Save Money, Rebrand

Image: American Apparel Closing Stores in an Effort to Save Money, Rebrand
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By    |   Tuesday, 07 Jul 2015 11:53 AM

American Apparel announced this week it is closing many of its underperforming stores in an attempt to save money and revamp the company’s image.

The clothing company did not specify how many of its 239 stores would be shut down, though officials admitted the move will cut costs by $30 million over the next 18 months, according to USA Today.

Paula Schneider, CEO, acknowledged that shutting down the stores in “unprofitable and over-saturated markets” is a part of “necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability,” USA Today noted.

Still, many American Apparel employees, who have already dealt with furloughs and shorter hours, are worried they will lose their jobs.

“The majority of people — we are very fearful that any minute it will hit any of us,” Piedad Torres, a 59-year old mother who has worked for American Apparel for two years, told the Los Angeles Times.

"We are committed to turning this company around,” Schneider said, according to CNN. She assumed the CEO position in January after former head of the Los Angeles-based company, Dov Charney, left amid several sexual harassment lawsuits.

Charney had been twice fired as a result of sexual harassment and mismanagement allegations against him. He has responded to his accusers with more than 20 lawsuits and administrative actions, American Apparel announced to CNN.

"The company believes these cases are meritless and intends to vigorously defend such actions and, where possible, pursue remedies against Mr. Charney for his actions," the news network reported.

But Charney’s attorneys say that the whole thing is a “complete sham.”

Since Charney’s scandals, American Apparel has experienced a $26.4 million first-quarter net earnings loss and a 5 percent same-store sales decline, reported USA Today. The company’s stocks have dropped as well.

To distance the brand from Charney’s sexual harassment charges, the company is trying to change its image. It plans on downplaying the sexuality usually displayed in advertisements and featuring more mothers and children.

“Focused on advanced basics” is American Apparel’s new fall product line. The company hopes to decrease the number of products offered in inventory while also manufacturing new and profitable products.

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American Apparel announced this week it is closing many of its underperforming stores in an attempt to save money and revamp the company’s image.
american apparel, closing, underperforming, stores
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2015-53-07
Tuesday, 07 Jul 2015 11:53 AM
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