American Apparel, the Last Shred of Decency
by Judy Bachrach
SEPTEMBER 13, 2010 TAGS:
“I’ve had relations, loving relations that I’m proud of,” the American Apparel entrepreneur Dov Charney informed Business Week at a time few challenged the wisdom of the wildly successful businessman. “I think it’s a First Amendment right to pursue one’s affection for another human being.”
Well, that was in 2005, when the amount of affection for Charney and his company was seemingly as limitless and novel as his interpretation of the Constitution. There never was anything like American Apparel, and quite possibly, now that the company has endured financial chaos and hired a restructuring firm, there may never be again. It owes over $91 million. Its share price, once almost $17, is now down to just over a dollar. Its second quarter losses are between $5 million and $7 million.
This is a sorry fate for an enterprise that once knew no limits. Not so long ago, strippers were Charney’s fitting models. Porn stars with cotton-candy hair and famished mouths adorned some of AA’s most provocative ads for, oddly, clothing. The only hint that there was something besides flesh for sale was a skimpy pink American Apparel jersey hiked up over pneumatic boob twinsets.
V-neck Ts that shimmied down slender frames, hip swimsuits, cotton dresses and cool underwear allowed Charney, who began his career selling T-shirts in Montreal, to pull in $250 million a year. Legions of young adults craved the American Apparel look, and not only because the stuff actually fit well. Time and again, consumers were told, the AA items were made in the USA by decently compensated garment workers who received health care benefits. In the company’s own words, it was “sweatshop-free.”
Hip, sexy and allegedly ethical? Who could resist?
As it turns out: many, many people. At the height of American Apparel’s robust coolness, for instance, it featured on its non-porno billboard sites a large photo of the director Woody Allen decked out as a Hassidic rabbi, which is how he appeared in a scene from the film Annie Hall.
Only slightly taken aback, the director sued AA. (“They’re not classy,” was his classy quote. “If I’m going to do a commercial it would have to be for, as I said, a large amount of money…. It would have to be for a product that would enhance my reputation.”) In vain did the clothing company’s lawyers insist that after marrying his extremely young adopted daughter, Soon-Yi, Woody was in no position to discuss reputation. AA had to hand over $5 million to restore Woody’s shattered self-esteem.
And then there were the sexual harassment lawsuits – perhaps the inevitable result of what Charney believed was his “First Amendment right to pursue one’s affection for another human being.” There were a number of these human beings working for AA, and not all were as convinced as its CEO about what the Founding Fathers promised future generations.
Some settled their suits, but just two years ago the investigative website TMZ revealed that Jeneleen Floyd, who once worked for American Apparel in the product placement division, claimed that among the reasons she could no longer stand hanging around the cool company was because one fine day “Defendant Charney sat down and ordered Plaintiff to ‘pretend to masturbate.’” When Floyd refused the offer, she added, “Defendant Charney told another employee to follow suit and “simulated an oral sex act with him.’”
Also along the way, a lot about the clothing company began to change. For example, in a recent shareholder’s lawsuit it’s being claimed that over 1,800 of Cherney’s happy, well-compensated employees had to be laid off when the federal government learned they…um… didn’t have the proper documentation to work for the socially responsible company.
Deloitte & Touche, the accounting firm, also no longer works for American Apparel, citing the unreliability of last year’s financial statements. These days, however, that little problem has gone away since for the past two quarters no financial statements at all have been filed.
“Now there are no certainties,” Charney says, when questioned by Businessweek.com. “There were things we could always rely on: that lenders will always be there and that they’ll behave ethically and that they’ll always have money. That you can trust that as the sun comes up, the consumer will be healthy…” No more.
As for the clothes, the old exciting AA aesthetic isn’t too trustworthy either. Charney wants his company, should it survive, to go preppy.
Really.
“Do you want to be a hipster?” he asked, of all publications, The Village Voice. Then: “Nobody wants to be a hipster.”
Judy Bachrach, a contributing editor for Vanity Fair, writes regularly for Obit, where her Ask Judy column, with advice for friends and family of the dying, appears Wednesday.
Well, that was in 2005, when the amount of affection for Charney and his company was seemingly as limitless and novel as his interpretation of the Constitution. There never was anything like American Apparel, and quite possibly, now that the company has endured financial chaos and hired a restructuring firm, there may never be again. It owes over $91 million. Its share price, once almost $17, is now down to just over a dollar. Its second quarter losses are between $5 million and $7 million.This is a sorry fate for an enterprise that once knew no limits. Not so long ago, strippers were Charney’s fitting models. Porn stars with cotton-candy hair and famished mouths adorned some of AA’s most provocative ads for, oddly, clothing. The only hint that there was something besides flesh for sale was a skimpy pink American Apparel jersey hiked up over pneumatic boob twinsets.
V-neck Ts that shimmied down slender frames, hip swimsuits, cotton dresses and cool underwear allowed Charney, who began his career selling T-shirts in Montreal, to pull in $250 million a year. Legions of young adults craved the American Apparel look, and not only because the stuff actually fit well. Time and again, consumers were told, the AA items were made in the USA by decently compensated garment workers who received health care benefits. In the company’s own words, it was “sweatshop-free.”
Hip, sexy and allegedly ethical? Who could resist?
As it turns out: many, many people. At the height of American Apparel’s robust coolness, for instance, it featured on its non-porno billboard sites a large photo of the director Woody Allen decked out as a Hassidic rabbi, which is how he appeared in a scene from the film Annie Hall.
Only slightly taken aback, the director sued AA. (“They’re not classy,” was his classy quote. “If I’m going to do a commercial it would have to be for, as I said, a large amount of money…. It would have to be for a product that would enhance my reputation.”) In vain did the clothing company’s lawyers insist that after marrying his extremely young adopted daughter, Soon-Yi, Woody was in no position to discuss reputation. AA had to hand over $5 million to restore Woody’s shattered self-esteem.
And then there were the sexual harassment lawsuits – perhaps the inevitable result of what Charney believed was his “First Amendment right to pursue one’s affection for another human being.” There were a number of these human beings working for AA, and not all were as convinced as its CEO about what the Founding Fathers promised future generations. Some settled their suits, but just two years ago the investigative website TMZ revealed that Jeneleen Floyd, who once worked for American Apparel in the product placement division, claimed that among the reasons she could no longer stand hanging around the cool company was because one fine day “Defendant Charney sat down and ordered Plaintiff to ‘pretend to masturbate.’” When Floyd refused the offer, she added, “Defendant Charney told another employee to follow suit and “simulated an oral sex act with him.’”
Also along the way, a lot about the clothing company began to change. For example, in a recent shareholder’s lawsuit it’s being claimed that over 1,800 of Cherney’s happy, well-compensated employees had to be laid off when the federal government learned they…um… didn’t have the proper documentation to work for the socially responsible company.
Deloitte & Touche, the accounting firm, also no longer works for American Apparel, citing the unreliability of last year’s financial statements. These days, however, that little problem has gone away since for the past two quarters no financial statements at all have been filed.
“Now there are no certainties,” Charney says, when questioned by Businessweek.com. “There were things we could always rely on: that lenders will always be there and that they’ll behave ethically and that they’ll always have money. That you can trust that as the sun comes up, the consumer will be healthy…” No more.
As for the clothes, the old exciting AA aesthetic isn’t too trustworthy either. Charney wants his company, should it survive, to go preppy. Really.
“Do you want to be a hipster?” he asked, of all publications, The Village Voice. Then: “Nobody wants to be a hipster.”
Judy Bachrach, a contributing editor for Vanity Fair, writes regularly for Obit, where her Ask Judy column, with advice for friends and family of the dying, appears Wednesday.
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