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American Apparel in Pit, Company Looks Upon New CEO

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Published on : Jun 17, 2015

American apparel may have a tarnished public image, but it is serious business. The apparel maker has over 10,000 employees, operates the largest garment unit in the US, runs over 230 stores worldwide, and generates above US$600 million in sales every year.

The operations of the company are beyond the stuff that catch most of the headlines, such as it mostly bright and extravagant, pornography imagery which is mostly inspired from 1970s and antics displayed by the founder and former CEO of the brand. Dov Charney, the former CEO who is held in several workplace lawsuits as much as he is known for creating a multimillion dollar brand.

It has been one year since Charney was ousted and the operations of the company are in terrible state. The brand needs a turnaround. The new CEO appointed by the board in December, Paula Schneider, is the person everyone is looking upon. 

The new CEO is taking on a company which was flirted with bankruptcy in 2010, and since has racked losses of US$300 million. The company has never been able to recover stock prices, mostly trading lesser than a dollar, much lower than its peak of US$15 in late 2007.

Schneider’s plan, as charted in an investor presentation submitted to the SEC recently, mainly consists of this: focus on the core business, avoid the peripheral distractions, and aim for the company to grow at US$1 billion in sales.

Schneider earlier took off pubic hair and nipples off the website, which offers an example of that thinking. Schneider is credited to revive Warnaco which manufactures swimsuits for Speedo and Calvin Klein. 

However, some have criticized the decision to be untrue and unlike of American Apparel, a means to hide the natural human body.

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