American Apparel Eyes Comeback After Bankruptcies

After two bankruptcies and a messy controversy regarding its founder, American Apparel is trying to make a comeback, according to CNBC.

American Apparel went bankrupt two separate times, in 2015 and 2016. Part of that was also due to the slowing-down of brick-and-mortar stores in the mid-2010s, as online retailers like Amazon rose to prominence.

Since buying the company for $88 million in 2017, Canada-based Gildan Activewear has been working to bring customers back.

The company was once a darling on the retail scene, known for cool and provocative advertising that portrayed it as made-in-LA. The firm paid its workers well, an anomaly in an industry usually plagued by poor working conditions.

Founder Dov Charney was touted as a visionary in retail. Jan Rogers Kniffen, CEO of J. Rogers Kniffen WWE, said Charney was ahead of his time, manufacturing in the U.S. and taking on pressing social issues, such as immigration and LGBTQ concerns. He didn’t use models who were airbrushed or edited.

But controversy began to dog Charney as he was accused of sexual harassment, and people pondered if American Apparel’s sexualized image went too far. Then in 2014, the board voted to oust Charney as the head of the company.

In an emailed statement to CNBC this month, Charney said the board had asked him to voluntarily step down as CEO and give up his 27 percent stake in the company, or else he would be forcibly removed.

He said the accusations were “old, discredited allegations,” and he said the company had embarked on a well-financed media campaign to smear his name and ruin his reputation as a successful entrepreneur and executive.

In 2018, a new American Apparel store opened in Los Angeles, the first one since Gildan Activewear bought the company. According to Garry Bell, vice president of Corporate Marketing and Communications, the location on Melrose Avenue was the site of an old American Apparel store that had closed.