Did American Apparel Go Out of Business? Decoding the Brand’s Tumultuous Journey

American Apparel. The name conjures up images of vibrant basics, ethically made clothing, and a sexually charged, often controversial, advertising style. But the story is more complex than just spandex and sweatshop-free promises. Did American Apparel go out of business? The short answer is both yes and no. The original American Apparel, the one founded by Dov Charney, filed for bankruptcy twice and ultimately ceased its independent operations. However, the brand name and intellectual property were acquired, and American Apparel, in a reincarnated form, still exists today under new ownership. Let’s delve deeper into this fashion saga.

The Rise and Fall of the Original American Apparel

A Vision of Vertical Integration and “Made in the USA”

Dov Charney, a young entrepreneur, founded American Apparel in 1989. He envisioned a company that would be vertically integrated, meaning it would control every aspect of its production, from spinning the yarn to selling the finished garments. The brand was proudly “Made in the USA,” a rarity in the increasingly globalized fashion industry. This commitment resonated with consumers seeking ethical and locally sourced clothing. American Apparel’s popularity soared, particularly among younger demographics, drawn to its simple designs, wide color palette, and perceived authenticity.

Controversy and Financial Troubles

However, American Apparel’s story wasn’t all sunshine and rainbow stripes. Dov Charney’s controversial leadership style and numerous sexual harassment allegations created a constant cloud of scandal around the company. These issues, coupled with aggressive expansion and mounting debt, led to serious financial difficulties. The company faced significant legal settlements and declining sales.

Bankruptcy and Ultimate Demise

In 2015, American Apparel filed for its first bankruptcy. Despite restructuring efforts, the company couldn’t overcome its financial burdens and filed for a second bankruptcy in 2016. This time, the end was near. The company’s assets, including its brand name, were sold to Gildan Activewear in 2017. Gildan closed all American Apparel’s retail stores and manufacturing facilities in the United States, effectively marking the end of the original company.

American Apparel Reborn: Under New Ownership

Gildan Activewear’s Acquisition

Gildan Activewear, a Canadian apparel manufacturer, purchased the American Apparel brand and intellectual property for approximately $88 million. Gildan’s primary interest was in the brand’s established reputation and its potential for wholesale and online sales.

A Different Approach

Under Gildan’s ownership, American Apparel operates very differently. The brand no longer manufactures its clothing in the United States. Production has been moved overseas to take advantage of lower labor costs. While the commitment to “Made in the USA” is gone, Gildan has maintained the brand’s focus on basic apparel and a wide range of colors.

Online Presence and Retail Partnerships

The new American Apparel primarily exists as an online retailer. It also partners with various retailers to sell its products. While the brand’s physical presence is significantly reduced compared to its heyday, it still reaches consumers through digital channels and select retail partnerships.

The Legacy of American Apparel

Despite its turbulent history, American Apparel left a lasting impact on the fashion industry. It demonstrated the potential of vertically integrated manufacturing in the United States and popularized the concept of ethical fashion. The brand’s minimalist aesthetic and focus on basic apparel influenced countless other brands and designers. Even in its reincarnated form, American Apparel remains a recognizable name with a unique brand identity.

Frequently Asked Questions (FAQs)

1. Is American Apparel still in business today?

Yes, American Apparel still exists, but it’s not the same company it once was. Gildan Activewear owns the brand and sells American Apparel products primarily online.

2. Where is American Apparel clothing made now?

American Apparel clothing is no longer manufactured in the United States. Production has been moved overseas to countries with lower labor costs.

3. What happened to Dov Charney, the founder of American Apparel?

Dov Charney was ousted from American Apparel in 2014 due to alleged misconduct and financial mismanagement. He later attempted to start a new clothing company called Los Angeles Apparel, which has also faced its own controversies and challenges.

4. Why did American Apparel file for bankruptcy?

American Apparel filed for bankruptcy due to a combination of factors, including high debt, declining sales, legal settlements related to Dov Charney’s alleged misconduct, and aggressive expansion.

5. Is American Apparel still “Made in the USA”?

No, American Apparel is no longer “Made in the USA.” This was a key characteristic of the original company, but it was abandoned after Gildan Activewear acquired the brand.

6. Where can I buy American Apparel clothing?

You can purchase American Apparel clothing online through the brand’s official website and through various retailers that carry the brand’s products.

7. What is the quality of American Apparel clothing like now?

The quality of American Apparel clothing under Gildan’s ownership may differ from the quality of the original products. Some consumers have noted a decrease in quality, while others find it to be comparable. It’s best to read reviews and compare products before making a purchase.

8. Is American Apparel still considered an ethical brand?

The question of whether American Apparel is still an ethical brand is complex. While Gildan Activewear has its own corporate social responsibility initiatives, the brand no longer adheres to the “Made in the USA” principle that was central to the original company’s ethical appeal.

9. What kind of clothing does American Apparel sell now?

American Apparel continues to sell basic apparel, including t-shirts, leggings, hoodies, and underwear. The brand is known for its wide range of colors and simple designs.

10. What is the difference between the old and new American Apparel?

The key differences between the old and new American Apparel are the ownership, manufacturing location, and ethical stance. The original American Apparel was founded by Dov Charney, manufactured its clothing in the United States, and positioned itself as an ethical brand. The new American Apparel is owned by Gildan Activewear, manufactures its clothing overseas, and no longer emphasizes its ethical credentials to the same extent.

11. Is Los Angeles Apparel the same as American Apparel?

No, Los Angeles Apparel is a separate company founded by Dov Charney after he was ousted from American Apparel. While Los Angeles Apparel shares some similarities with the original American Apparel, it is a distinct entity with its own challenges and controversies.

12. What is the future of the American Apparel brand?

The future of the American Apparel brand remains to be seen. Under Gildan Activewear’s ownership, the brand has maintained a presence in the market, but it has lost some of its original identity and appeal. Whether the brand can successfully adapt to changing consumer preferences and maintain its relevance in the long term is an open question.