Could the End Be Near for American Apparel?

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Get your see-through bodysuits and metallic spandex while you can people! According to the New York Post, American Apparel is facing adversity that could leave the mega retailer high and dry. Fourth quarter sales are down 23% as of this past Friday. Apparently in the past year and a half American Apparel has had difficulty keeping “their shelves fully stocked thanks to the vise-like grip on cash kept by Lion Capital, [a major stake holder and] the London-based investment firm whose March 2009 financing deal saved Charney’s bacon.” But it’s not only American Apparel’s parent company that’s to blame.

“American Apparel’s party has also been pooped by the federal government,” the NYP (oh so eloquently) points out. Apparently when the feds raided American Apparel’s Los Angeles warehouses last summer and “charged that one third of the workers at the retailer’s Los Angeles factory were illegal immigrants,” the loss of so much of the company’s workforce was crippling. Despite Charney’s longtime championing of workers’ rights, it’s the hiring of illegal ones that may be his downfall.

But don’t get your pantytime in a bunch just yet. The outlook may be relatively dire over at American Apparel HQ as of late, but there’s little chance the hipster mecca will be going under anytime soon. As long as the brand can settle its manufacturing man power and parent company problems, there should be no more of the latter. After all, the empire’s buzz generator and business model is unlike many seen before. And the demand for cut-out leggings and deep v tees is rampant the world over… that is, as long as Charney can continue supplying for the demand.