American Apparel will launch an e-commerce shop on eBay in September as part of the Los Angeles-based retailer’s efforts to expand distribution beyond its own stores. The online shop will be accessed via a prominent link on the eBay home page and American Apparel expects the online store to generate several million dollars in sales within its first year.
This story first appeared in the July 26, 2011 issue of WWD. Subscribe Today.
The shop is believed to be part of a larger upcoming eBay platform for dedicated brand stores. Officials at eBay declined to comment on the rollout.
“There are more than 30,000 searches for American Apparel on eBay each month and right now those customers are not buying from us directly. I’m excited to connect that demand with our vertically integrated production and distribution platform to create a new revenue channel for American Apparel,” said Dov Charney, founder and chief executive officer of American Apparel.
The American Apparel shop will do business via the eBay selling and checkout interface, with orders delivered by American Apparel’s fulfillment systems. American Apparel will also control merchandise assortments and photography on the site. The launch date of the shop is tentatively slated for Sept. 1.
The eBay initiative is targeted at American Apparel’s core base of tech-savvy, 18- to 25-year-old customers who spend lots of time online, while also reaching eBay’s broad base of users in middle America. “Our customer loves buying on the Internet but I think we’ll also get a new customer. The average eBay customer is about 10 years older and the site sells to people all over America,” said Marty Staff, chief business development officer at American Apparel. “This is a way to quickly jump-start an additional e-commerce business with a best-in-class partner.”
American Apparel will pay a commission to eBay on all sales from the new shop. Currently, American Apparel’s online sales as a percent of the company total are in the high single digits, said Staff. “We want to get to 10 percent quickly,” he added.
In the second quarter, American Apparel’s online sales increased 19 percent compared with the year-ago quarter, while same-store sales in brick-and-motor units were flat. As of June 30, the company operated 254 stores in 20 countries.
The eBay shop is one prong of a multidimensional effort to energize top-line growth at American Apparel, which narrowly averted a Chapter 11 bankruptcy filing in April before being bailed out by a Canadian investor group. The company is in advanced talks with Bloomingdale’s to open leased spaces in up to four of those department stores in the U.S., as first reported by WWD on July 13. New leased spaces are set to open in three Selfridges stores in the U.K., joining the existing American Apparel shop in the London flagship. Additionally, Galeries Lafayette will add an American Apparel shop in France, in addition to the one in its Paris flagship. The existing shop-in-shops in London and Paris ring up more than $2,000 in sales per square foot, said Staff.
The retailer has also targeted the college market and is close to sealing a deal with three major companies that control the lion’s share of college book stores in the U.S. about supplying apparel in up to 2,500 campus stores.