Fast fashion sweeps the US independent brand bankruptcy crisis

If you do not want to go bankrupt, they have only 18 days.

"Israeli" news: bright, easy, a little cheap, American Apparel became a famous brand in high street. The Los Angeles-based retailer sells the basic monochrome. For years, their ads have been suspected of being pornographic; wacky founder Dov Charney has also been accused of sexual harassment. American Apparel seems to be on the decline.

Charney and his managers were surrounded by angry voices, their recruiting clerk's regulations and procedures were attacked, and applicants had to provide full-body photographs, and this practice was suspected of discrimination.

This is not their most troublesome thing. If you do not want to go bankrupt, they have only 18 days. Investors are currently in control and they lend money to the company for expansion. Thirteen years ago, Charney founded the company. Today, he owns more than half of the shares but may not be able to maintain it until the end of this month.

The fact is clear: American Apparel is not the hottest product anymore. Uniqlo is rapidly expanding; H&M and Zara attract value-conscious fashionistas. These brands are changing faster than American Apparel.

Charney appreciates the business model has come to a crossroads. His slogan is "a non-sweatshop." All the clothes are produced at the headquarters in Los Angeles and there is no choice of low-cost countries. On the one hand, sales have fallen. On the one hand, they have not been able to emerge from the recession like other brands. What the founder must do.

He said: "Everything must be integrated...We will be able to reach a positive position. I am motivated. I work seven days a week. I hope everyone is proud and I thank everyone for their patience."

In less than a month, the employee policy was controversial. According to a blog in New York, the headquarters dismisses ugly employees. Photographs submitted by employees at the time of application must be complete, that is, there must be no ugly place.

The company’s former employees stated that the store’s manager must send employees’ photographs to the management on a regular basis, and management judges their appearance and clothing.

Once managers were told that they couldn't hire the kind of black girls who couldn't use them. They could only pick classic black girls and had good hair. An ex-employee wrote: "They not only stipulate our clothes, but also stipulate our eyebrows, make-up, nails, and hair color. Our store consultants tell the girls on many occasions to lose weight. They will refuse to apply according to appearance or shoes. By."

Their interviews are more like picking models. They admitted that "we did shoot, but it wasn't a picture. We were choosing a personal style."

Creative Director Marsha Brady said that AmericanApparel’s clothes are “more like art than fashion, so when we hire people, we must consider whether they can put our clothes on, make the clothes exciting, and show the overall effect. It's not that it's not that beautiful or beautiful... Sometimes you'll be asked to take some matching pictures to make sure employees can reflect new products, but it's not very frequent."

Now, the chain’s employment policies are also subject to inspections, just like the models in their erotic advertisements are controversial. There are often thin girls in their advertisements that look as though they are underage.

Last year, the British Advertising Standards Agency banned one of their advertisements. The ad is a semi-nude model that looks less than 16 years old. Many of American Apparel's models are amateur and come from the streets; many photographs were taken by 41-year-old Charney himself. He is now in many cases of sexual harassment. None of these allegations were confirmed in court, but at least one of them was reconciled.

The accusations against him included going to bed with a model, wearing only underwear in the office, and holding a naked board.

Charney's success story is very old-fashioned: When he was young, he started from a T-shirt imported from the United States (he grew up in Montreal). In the 90s, he began to produce his own T-shirt. Up to now, AmericanApparel has 10,000 employees and operates 285 stores in 20 countries.

Sexual harassment, advertising, and discriminatory content have already masked the good side of the brand, such as "Made in America." All products are produced in downtown Los Angeles, where employees earn twice as much as the minimum wage.

In addition to the reputation crisis, American Apparel also faced a financial crisis. The Los Angeles factory has 1,500 illegal immigrants, nearly one-third of the total number of workers. American Apparel strives to maintain the operation of the factory.

In addition, in-store sales fell by 10%, while other high street brands have long been out of the shadow of the economic crisis.

What's worse is that the company has not made any profits to expand its operations and is now unable to meet its commitments on schedule. The deadline is at the end of this month. London’s investor “Lion Assets” helped last year. Ameircan Apparel limped with $91.4 million in debt. The final decision is in the "Lion Assets" - the conversion of debt into shares or the bankruptcy of the company.

This company is based on the personality and creativity of Dov Charney. If his strength is weakened, perhaps everyone will not think it is a bad thing.