Right, the situation has moved into make or break for American Apparel. We have detailed on this blog the break down of the brand and the possibilty of liquidation. Now things have not improved at all. But the companies investors have moved to allow the company more time to turn things around.Basically their investors are Lion Capital. They originally stated that the earnings of AA had to remain above a certain level before things like taxes were taken out. They have eliminated that restriction -No I don't understand it either - but apparently it's a good thing. But Lion are insisting that they improve the profits of the company which has major losses this year.
“Lion Capital has enormous admiration for both American Apparel and its founder, Dov Charney,” he said. “We are working together with Dov to realign the capital structure of American Apparel to support a number of key initiatives within the business, including the hiring of several new senior executives.”
OK, read between the lines here. Clearly they have to state that they have confidence in DC. They can't come out right and state that he's wrong. He is a vital part of the company. But if you look at the last line - the bit about key initiatives - which means they plan on changing the way he runs the company. Making changes to what he has been doing there. Which in turn to me suggests a lack of confidence. His ideas don't work and haven't been working for some time now.
Also note the piece about the new senior executives - They are giving him less say. Simple as. Interesting.
I'm sorry though. I can tell you how to change your company for the better. In three easy moves :
1 - get rid of the major of snotty staff which you insist on hiring which all fit ' the look '. But can't be bothered going to get that pair of leggings in your size. So far the Dublin store seems to be a once off for nice staff.
2 - Instead of isolating women by sexualizing them. Invite them in. Stop getting their boobs out, their legs in and what not. Take back the adverts. Stop the sexist advertising. It would get so many women back in your store if they feel that they are being spoken to like actual consumers not encouraged to get naked all time! If that takes Dov Chegney being fired...then so be it.
3 - Reduce your prices. A pair of leggings for £30? I think not. River Island is the most successful brand at re-pricing. Addressing their clientele's need for lower prices given the recessionary times and they made everything a lot more affordable. So as a result, more people shop in River Island. Myself included.
What do you think? how could you save American Apparel?
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