STRIP DOWN: American Apparel workers in Germany have gone public to vent their frustrations with management in Los Angeles.
The actions over the weekend come a few weeks after it was learned the struggling company’s subsidiaries outside the U.S. have stopped receiving new inventory shipments, thus accelerating filings for administration, or bankruptcy, in places such as Canada and Europe.
The protests, limited to employees in Germany where the company has eight stores, involved about 100 people, according to one of the organizers.
The workers have also taken to social media to vent their frustrations, photographing themselves in little clothing and holding up signs asking that Los Angeles send them clothes to sell. The subsidiaries buy clothing at a steep discount off the retail price from headquarters in some cases pre-paying for the inventory in exchange for credits.
Worker frustration stems from the lack of information on the decision to stop inventory shipments overseas, which one worker in Berlin, speaking on condition of anonymity, said came overnight with little reason provided to employees. The store worker also said prices more recently dropped on top-selling items, pointing to specifics such as a cord jacket that went from $185 to about $3 at current exchange rates, or the fisherman pullover that went from about $84 to $1.
“It was really hard to get a hold and get any picture of what was happening,” another worker said. “We’re still really in the dark [about] what’s going on. What’s their master plan?”
He went on to say some workers have felt in the dark for some time now, and mentioned changes to the company’s inventory mix that began with the appointment of former chief executive officer Paula Schneider in late 2014 that did not take among the company’s customer base in Germany. He cited the specific example of the company’s high-waisted Easy Jean, which stores ran out of last year, replaced by a low-waisted pant that was not as popular among shoppers.
“Unfortunately, this process is not within American Apparel’s control any longer, according to the law and custom of administration,” a company spokeswoman said in response to the protests. “American Apparel took great care to appoint the best administrative professionals in Europe, because we care deeply about our former employees and customers.”
Clarity on what’s to come for American Apparel is hard to come by. The company, in the midst of its second bankruptcy less than a year after emerging from its first, has struck a possible deal to sell its intellectual property along with other assets to Montreal-based Gildan Activewear Inc. for $66 million. The deal does not include the company’s retail units and makes Gildan the stalking horse bidder in a bankruptcy auction that’s expected to shake loose other potential buyers for the business.
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