American Apparel Announces Store Closings

Last week came the news that American Apparel will be closing all 110 of its retail stores, as well as its L.A. headquarters and two factories, ending its 20-year run as one of the country’s biggest manufacturers. The closing includes its two Minnesota stores at Mall of America and in Uptown Minneapolis on W. Lake St. near Hennepin Ave. S. Store employees said the stores would close by the end of April, with current markdowns of 40 percent storewide at both locations.

The brand won’t be disappearing completely: Last week, Canadian wholesaler Gildan Activewear acquired the company for $88 million at bankruptcy auction. The Gildan’s portfolio, which includes value-priced brands such as Gold Toe socks and Silks hosiery, is decidedly unsexy, indicating the once-premium American Apparel brand may be headed for the bargain bin. It’s unclear whether the brand will continue to be manufactured in the U.S. or overseas.

At its peak in 2007, American Apparel was valued at $1 billion. Known as much for its commitment to ethical manufacturing as its provocative advertising, American Apparel was founded in 1989 by Dov Charney, who was fired from the company as CEO in 2014 following sexual harassment lawsuits filed by several employees. When the brand attempted to tone down its hyper-sexualized image, it lost its identity—likely the reason it drove away its once-fervant fan base. The brand never recovered, going bankrupt twice in 2016.

Why should we care? For one, American Apparel is credited with pioneering the made-in-the-U.S.A. manufacturing movement and offering its factory workers a fair wage and benefits. The company was something of an anomaly in an era in which most American brands were being manufactured overseas, where it is often difficult to ensure ethical labor practices. Second, the brand was founded on the idea of creating high-quality basics at the higher prices that its quality and manufacturing required—a trend that is now gaining traction with the launches of ethically minded, upscale basics brands Zady, Everlane, and Minnesota’s own Northwestern Knitting Company. At the same time, American Apparel appeared to stray from its roots as a brand know for quality basics as it attempted to be all things to all shoppers and stocked trendier items. It’s a major blow to the American manufacturing movement, and a cautionary tale for brands both old and new.