Long time readers of OzSoapbox will no doubt know that my relationship with the clothing brand American Apparel has been a turbulent one.

By far my favourite brand of tshirt out there, for years now I’ve been caught between loving the style of American Apparel’s plain fine jersey tshirts and learning to live as a second class citizen.

As far as American Apparel’s marketing department is concerned, anyone living outside of the US is gullible consumer whore trash all but willing to be shafted over to kingdom come.

Back in March this year American Apparel announced that they were on the verge of bankruptcy. For me the reason for this bankruptcy was clear. By operating in a global market and subsequently ripping off their entire international customer base, American Apparel had dug themselves into a massive financial hole.

People like me want to buy their tshirts but refuse to because of the bullshit prices we are charged by American Apparel.

For me, the last straw was learning that all third party only resellers of American Apparel were forced to start putting crappy logos on their plan fine jersey tshirts. Thus negating the primary reason I fell in love with the fine jersey’s in the first place, they were plain, simple and good fitting tshirts.

Fast forward to August and it seems nothing much has changed over at American Apparel HQ. The business side of the company still seems to be run by complete idiots.

For the months of March, April and May American Apparel reported a 7 million dollar loss, and yesterday revealed a total debt of 120 million US dollars.

Additionally,

the retailer said it was likely to breach the terms of its agreement with its main lender, private equity firm Lion Capital, next month.


Not working in the finance sector I’m not entirely sure what your standard lending agreement is but I’m assuming a breach is code for ‘sorry but we didn’t make any money this quarter so we can’t repay you’.

As if that wasn’t bad enough it’s also been revealed that American Apparel are under investigation by US authorities.

The company also said in its quarterly report that it received a federal subpoena in July – as well as inquiries from the U.S. Securities and Exchange Commission – regarding the resignation of its former auditors.


American Apparel’s former auditors were some accounting firm called Deloitte. They quit back in March ‘after warning of problems with the company’s financial reporting‘.

Again, I’m not a finance expert but I’m pretty sure ‘problems with the company’s financial reporting‘ is code for ‘these guys have absolutely no idea what they are doing’.

When I last wrote about American Apparel I had no idea who American Apparel founder Dov Charney was and stated that I didn’t care. Evidently perhaps I should care as this guy seems to be content to run American Apparel into the ground.

When asked about the troubles American Apparel are facing, Charney stated

A lot of assumptions that I grew up with are no longer reality.Those were things that we could rely on: that lenders will always be there, that they’ll behave ethically and they’ll always have money, that you can trust that as the sun comes up the consumer will be healthy, that we’ll always be close to full employment in developed nations.

Now there are no certainties.


So let me get this straight. The founder of American Apparel’s business plan revolved around the certainty that money will always be able to be borrowed, economies will remain healthy and employment will never fall.

Jesus fucking christ is it any wonder American Apparel has a hard on for inevitable bankruptcy?!

I could waffle on about economics and what not but the problems American Apparel are facing can be broken down into much simpler terms. Here’s the simplest reason as to why the company continues to post such abysmal performance in the market place.

Currently if I order a 7 pack of plain fine jersey tshirts from American Apparel themselves (only available in white, black or asphalt), it’ll set me back $91 on sale with $25 whacked on for shipping to Taiwan.

This is a total of $116 USD.

Meanwhile if I head over to Tuffy McPuggles I can order a 6 pack of fine jersey tshirts in any color for $47.90 USD with $24.66.

This is a total of $72.56, a saving of $43.44 USD.

The downside? Tuffy McPuggles and all other resellers are not allowed by American Apparel to sell plain tshirts, they have to brand them and that is a huge turnoff for me. Infact I refuse to buy them.

What this policy does however is create the absolute absurdity that it is cheaper to buy LOGO BRANDED American Apparel tshirts from a 3rd party vendor then it is to buy FREAKING PLAIN TSHIRTS FROM AMERICAN APPAREL THEMSELVES!

Seriously, these are tshirts that have had logos applied to them (more work) and THEY ARE BLOODY CHEAPER THEN YOUR PLAIN TSHIRTS DIRECT FROM YOUR OWN GODDAMN STORE!

This and this alone is why American Apparel are being slaughtered in the market. How can you not sell a plain tshirt cheaper then a logo’d one?!

At the end of the day as tempting as it is to stock up on a decades worth of tshirts in the likely event American Apparel tshirts disappear, people like myself aren’t going to fork over the extra money and this is where you’re not seeing any sales. As far as sales distribution models go, this is complete and utter fail on American Apparel’s behalf.

Unless something is changed, as much as it pains me to say it, American Apparel and Dov Charney deserve their impending bankruptcy and everything that goes along with it.

Signed,

One fed up as hell American Apparel customer


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