American Apparel: The Year Ahead

After riding out the first part of the recession, the economic climate caught up to American Apparel and ceo Dov Charney last year.

The American Apparel store on the Lower East Side is one of seven the retailer has equipped with RFID to better manage its huge assortment of styles.

Can American Apparel’s Dov Charney get his mojo back?

After riding out the first part of the recession with a string of comps increases, the economic climate caught up to American Apparel Inc. and its voluble chief executive officer last year. For the fourth quarter ended Dec. 31, same-store sales fell 7 percent, which was preceded by a 16 percent decline in the third quarter.

The company has been forced to slow the pace of its store openings, adding just a net increase of 21 stores in 2009, ending the year with 281 locations. American Apparel has also sharply curtailed its online advertising efforts — resulting in lower e-commerce sales. The company posted a net loss of $1.9 million for the nine months ended Sept. 30.

“Of course, we are very cautious right now about opening new stores. But over time, that caution may subside,” said Charney on a November earnings calls with analysts, adding he believed store productivity and wholesale volume would improve as the economy recovered this year.

Despite losing 1,500 production line workers due to issues with their working papers last year, Charney is confident the company is well positioned to service vigorous retail expansion down the line. “We can handle the facilities we have,” he said, “and probably handle another 120 stores quite easily without much effort.”

load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
blog comments powered by Disqus