Blog: Leonie BarrieCan eBay rescue American Apparel?

Leonie Barrie | 27 July 2011

Are things finally starting to look up for American Apparel? Not only has it just signed a deal with eBay to start an online shop - which CEO and founder Dov Charney confidently believes could be worth millions in its first year - but it is also expanding its presence in Europe with department stores Selfridges in the UK and Galeries Lafayette in France.

There's no doubt the Los Angeles based manufacturer and retailer needs all the help it can get just now. It is currently battling to turn around sagging sales - retail revenues fell 8.2% to $72.7m in the three months to 31 March, with same-store sales dropping 8% over the same period - and has had to secure $14.9m in new financing to stave off the threat of bankruptcy. It was also warned earlier this month that its board makeup does not comply with NYSE Amex Exchange listing regulations.

And if that wasn't enough, Charney is also facing a $250m fine after a former employee filed a sexual harassment lawsuit against him.

Even though the firm reported flat second quarter revenues earlier this month, Charney bullishly proclaimed: "We believe ours will be a story of improving sales, improving margins and improving EBITDA." Quite how it's going to achieve this remains a matter for speculation.

Aggressive expansion into new markets and opening new distribution channels means that around 40% of American Apparel's stores are now located outside the United States. And with an estimated 30,000 searches for American Apparel on eBay each month, the aim is that the new online store will take the brand to untapped audiences.

Another ray of hope must come from the fact that online sales increased 19% in the company's second quarter - yet still account for less than 10% of its total revenues.


BLOG

US border tax a contentious issue

Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...

BLOG

Primark's sustainable cotton programme takes shape

With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...

BLOG

Trump administration starts to shake up trade

Last week we marked the inauguration of Donald Trump as the 45th president of the United States by taking a closer look at what's at stake for the textile and apparel trade – especially his promises t...

BLOG

Likely shifts in the sourcing landscape in 2017

Continuing our look at what lies ahead for the apparel industry and its supply chain in 2017, the panel of industry experts consulted by just-style last week tackled likely shifts in the sourcing land...

just-style homepage



Forgot your password?