Milestone One: Introduction and Analysis of Business Environment
American Apparel mission statement is committed to high quality products art, design,
and technology, employee care and limitations in the industry "(American Apparel, 2015).
The main goal of American Apparel was to make great quality clothing without the means of
utilizing cheap "sweatshop" labor and exploiting workers (Mehta, 2016). In addition to their
mission statement, American Apparel values were solely based on equality, diversity and
creativity. American Apparel not only brought us high quality basics, but was a store that
allow people like myself to be able to express themselves through art and clothing. Being
based in the United States, American Apparel was founded in downtown Los Angeles, being
both a manufacturer and retailer offering basic fashion for women, men, children as well as
babies. According to Mehta, as of February 2014, "the company had approximately 10,000
employees and operated 246 retail stores in over 20 countries." (Mehta, 2016). A business that
started so simple in 2006 became very popular.
While American Apparel was succeeding in a lane of their own from opening
numerous stores across the U.S, having an online sales platform, distinctive branding and
marketing. One person could not see a thriving company face as many challenges as American
Apparel. While some would find the advertising pleasing, others believed that the company
was too provocative. Seeing this has one challenge due to people not wanting to shop in a
place where the images were very sexually could be overlooked by the good quality that the
brand has to offer making this one of the main reason competitors stood a chance. Another
challenge was during 2009 when the company faced a federal investigation over immigration
issues forcing the company to have terminate over 2,000 employees. This created a huge
strain on meeting demands to complete orders on time (Mehta, 2016). During this time the
company's profit had drastically decreased from 36 to 3 million in one year. Having to
terminate so many employees, the company was never able to fully recover to the brand it
once was. Bye the end of 2010 the company had a net loss of 86 million (Mehta, 2016). Last
major challenge that I believe the company was facing is the allegations of sexual harassment.
As mention earlier, the marketing and branding of young women and men posing for explicit
photos the company was very sexualized. This is where it made competing business boom.
Business such as Gap, Urban Outfitters, American Eagle, etc. it made the value of American
Apparel deteriorate (Mehta, 2016).
Threats American Apparel faced were CEO creating a bad image, Charney sexual
harassment allegation was the forced that made the company change their code of ethics
within the company. According to Compliance Week the new code of ethics was, "The
company does not tolerate harassment, including abusive conduct, of, or directed towards, any
of our employees, whether by another employee, supervisor, officer, director, or third-party."
(Compliance Week, 2015). Another threat was a highly competitive