In Hopes of a Turnaround, American Apparel Is Changing Its Clothes

One might even call it the most important part of its turnaround plan.
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Eliza Brooke
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One might even call it the most important part of its turnaround plan.
An American Apparel store in 2014. Photo: Andrew Burton/Getty Images

An American Apparel store in 2014. Photo: Andrew Burton/Getty Images

This spring's headline-grabbing legal warfare between American Apparel and its ousted founder, Dov Charney, was almost enough to make you forget that the company is also striking out with consumers. In addition to losing $26.4 million during the first three months of the year, the brand reported in mid-May that its sales dropped 9 percent. And it's probably not just because shoppers are turned off by the less-than-aspirational conflict taking place on a corporate level.

What they do care about is the product. While there's been much ado about American Apparel's ads — #tbt, pubes — it's what goes on the sales floor that really matters. And on that front, the brand is making some changes. 

According to American Apparel CEO Paula Schneider, who has held the position since Charney was officially terminated in December, the product is need of tweaks, not a major overhaul. Power-washed t-shirts are doing well, as are jean shorts, tennis skirts and the low-cut bodysuit Nicki Minaj wore in her and Beyoncé's "Feeling Myself" video. But some ill-fitting men's pants haven't been selling, and things aren't optimally merchandised on the store floor. Schneider gives the example of American Apparel's men's hoodies: they're a bestseller, but occupy too much room in some stores — valuable floor space that could be used to promote other, less perennially popular products.

There's a sizable backlog of unsold inventory to contend with, too, half of which Schneider categorizes as "pretty good" and half of which is "not-so-good." For the former group, the team can try to merchandise it back onto the sales floor — pairing a slow-moving item with a fresher style — and hope it will sell. The not-so-good products will go on sale, trickling into stores over time. Moving patiently and slowly is the key here. Putting too much on super sale too quickly, as American Apparel did during a rather apocalyptic-looking "dot sale" last fall, can make a retailer look like it's going out of business and damage its brand in a big way.

"We're never going to do a dot sale," Schneider says of that sale, which took place before she had been appointed as CEO. "That was the most egregious thing ever, in my mind."

Sitting in a conference room in the New York office of her public relations team, Schneider makes it clear that she's not trying to dictate the look of the brand — at least one of the differences between her and Charney, whose name was essentially synonymous with American apparel's aesthetic. Schneider says she doesn't really care what the design team makes, just as long as everyone's on the same page about who the customer is.

"We had a design brief, and I said, 'Just show me who you're making it for, and you guys can continue on your way,'" Schneider says.

That customer fits into three buckets, Schneider says. There's the high school age girl who buys at an opening price point; the "classic girl" who's between 25 and 35, has grown up with the brand and isn't going for too-short skirts anymore; and the so-called "party girl." In Schneider's estimation, American Apparel has the first and last covered, but the company has "missed some volume in that classic girl" lately.

As for fall, expect about 100 new styles for women — a washable faux silk, top and skirt combos in plaids among them — and 50 for dudes. Schneider knows that this isn't going to be an overnight fix. But hopefully it's a start.

Homepage photo: Andrew Burton/Getty Images