LOS ANGELES — Dov Charney, chairman and chief executive officer of American Apparel Inc., said his company is on track to generate record sales this year and is sticking to his domestic manufacturing model.
Charney, who spoke to WWD following the company’s annual meeting here Thursday, has projected the retailer could post revenues of about $600 million this year, an increase of roughly 7 percent from its last revenue peak of $558.77 million in 2009. He confirmed the firm would meet its guidance for adjusted earnings before interest, taxes, depreciation and amortization this year of $32 million to $40 million, up from $14.5 million last year.
“I’m very happy with the company’s performance,” Charney said. “We’re having a very good launch into the summer. The customer is responding well to the product.
“The line is more sophisticated, especially on the women’s side,” he added. “I think we have more development to do on the kids’ and men’s lines.”
American Apparel has been gaining momentum. In May, net sales rose 17 percent to $49.7 million.
Losses persist at the company, although they are shrinking. For the three months ended March 31, the retailer recorded a net loss of $7.9 million, versus a loss of $20.7 million a year earlier.
When asked about the prospects the company would become profitable, the ceo said, “Eventually, cash flow flows to the bottom line.”
Charney said American Apparel’s focus this year has been on bettering store-level productivity and speeding up online delivery times. Another goal is to reach a wider audience by making the brand’s Web site available in more languages. The company doesn’t have Chinese language e-commerce capabilities yet.
An article published on June 3 in the Los Angeles Times sparked concerns about American Apparel’s long-term commitment to domestic manufacturing, but Charney called the notion that the company would head offshore “preposterous.” He suggested that the affordability of manufacturing in the U.S. has improved as labor costs in developing nations and transportation costs have escalated.
“When you look at the overriding cost of elongating the supply chain, I think this is the least expensive model,” said Charney.
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