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American Apparel's Dov Charney sees how far his knit empire will stretch.New York Magazine
August 23, 2004
On a sunny Saturday afternoon, Dov Charney-in town from L.A.-is slapping quickly up Broadway in his dime-store flip-flops, talking about debt financing. "Debt can be secured by receivables, real estate, equity," he says as he crosses Great Jones Street. His sunglasses are seventies-Jewish-grandfather, and the mustache is actually two sideburns that connect above his upper lip. "Then there's unsecured debt, which is more like junk bonds." Suddenly, he veers off to the curb, where a kid behind a card table is selling tank tops with handprints and ladies with big Afros on the front. The kid has barely started his pitch-"We're two guys in Brooklyn, making our own T-shirts"-when Charney interrupts. Fingering the fine-gauge ribbed cotton, he says, "These are American Apparel T-shirts." And the kid continues to try to sell to him: "Yeah, and we silk-screen them . . . "
Charney sticks out his hand. "I'm Dov. I own the company. How are you doing? You're using the 3308. Have you tried the racer back?" The kid is stunned, as if Derek Jeter had struck up a conversation about his baseball-card collection. Charney keeps talking. "This is how I started, selling shirts on the street. This is cool. If you have any ideas, you can tell me. It's Dov, no e, Dov. It means 'bear' in Hebrew. Dov, like the soap but without the e, at American Apparel dot net." The kid sputters a "Thanks, man," they exchange an interlocking thumb shake, and then Charney is off again, headed up to his flagship store at 712 Broadway. Really, it's a harbinger of things to come.
American Apparel is expanding-rapidly and conspicuously-into this city's punishing retail market. You've seen the white storefronts, light boxes in the signs, and TVs facing out to entertain the street. The shops are popping up like Starbucks (153 locations in Manhattan), or at the very least Sephora (eight). In less than ten months, four American Apparels have sprouted in Manhattan: on Broadway, in the old Antique Boutique space; on Sixth Avenue near Waverly; at the corner of Houston and Orchard, a block from Katz's deli; and the newest, at Spring and Greene, half a block north of Helmut Lang and a few doors east of Chanel, in a landmark building with a monthly rent of $40,000. In a few weeks, one will open in Williamsburg. Plans are under way for another Brooklyn store, on Court Street, and Charney is in negotiations for spaces at 23rd and First, Fifth Avenue across from the main library, and what's now the Ligne Roset store at 64th and Third.
Through wholesale channels, American Apparel already does a lot of business in New York. The Strand bookstore puts its logo on the Classic Girl Mélange Jersey S/S Gym. Columbia University prints on American Apparel; so does the NYPD. Whole Foods uses the short-sleeve crewneck made of organic cotton. It's fair to say that American Apparel has seriously penetrated the wholesale market once monopolized by Hanes, Fruit of the Loom, and Champion-in effect, coming through the service entrance of the clothing business. Now Charney's knocking on the front door: retail. Against some odds, he's established a kind of hybrid chain that somehow manages to retain its unique street credibility while swelling to global proportions-whose items like Baby Rib Sleeveless Crews and Brazilian Bikini Panties add up to an average of $6,000 in sales per store on a typical weekday. (The Broadway flagship often rakes in $18,000 on Saturdays.)
American Apparel spits out a million pieces a week at its 800,000-square-foot, seven-floor garment factory in downtown L.A. Sales have doubled every year for the past four, with a projected gross of $150 million for 2004. You've probably seen the "sweatshop free" claim: At last count, the company had 2,250 employees, and there was a waiting list 1,000 names long for the factory jobs that pay well above minimum wage, as much as $15 an hour.
"Doing stores was just the next step," says Charney, a tiny person whose hips would possibly fit into a Classic Girl Flat Bottom Panty small. He's sitting with his knees up on a brown crushed-velvet chair, mid-seventies vintage, in the small two-bedroom walkup he recently rented on Orchard Street. "New York is a great place to test retail. If you make it in New York, you might make it in London and Hong Kong. New Yorkers are the first to pay for quality, and they can afford it. They consume and dispose and consume and dispose. Everybody needs a T-shirt. If there's 8 million people in New York, everyone's wearing a knit-a sock, an underwear. Osama bin Laden, if he's alive, is wearing a knit right now." Charney aims for what he calls "first-mover advantage." He opens in mostly residential neighborhoods, where real estate is cheap and foot traffic high. And the more shops, the better. While a corporate behemoth like Banana Republic tries to hide its size and prefers that its customers hang onto the boutique illusion, American Apparel trumpets its intent to dominate the world-like it's a good thing. "We hope to be the Microsoft of the shmatte business," Charney says. "Coming soon," reads the ad copy in clean Helvetica typeface, "London, Berlin, Toronto, Portland and many more." There will be at least 25 American Apparel shops worldwide by the end of the year. "As long as FedEx can get the shirts there," Charney figures, "we can open a store there." He has fantasies of starting factories in London, China, and the African country of Gabon, all the while paying U.S. wages to local employees.
There is some irony in a guy from Montreal naming his T-shirt company American Apparel. But then again, this country suits the 35-year-old CEO. He is, above all, he says, "a hustler. In New York, you can hustle night and day. Montreal is a French town with British elements. The British culture looks down on the hustler. But New York's a city where the hustler has some respect." Charney reckons that "the youth," his target customers, are on the verge of a social, sexual, political, and industrial revolution. Whatever they're up to on a larger scale, they do seem to return time and again to American Apparel's graphic, spare but sexy spaces to fill up recycled plastic shopping bags. "The T-shirt has always been an icon of freedom," says Charney in his funny little voice, which seems to be playing on the turntable a little too fast. "And we have the best T-shirts. 'Sweatshop free' is a nice story with a violin, but also, hey, we're good at what we do. We're Ford in Detroit. I'm constantly studying and trying on garments: Is it too wide? Is the sleeve too long? How is this cuff? No one knows why Levis 501s are so perfect. The patina on the buttons or the curl of the stitch? The real seduction is this subliminal thing. As we say in Yiddish, it's fucking perfect."
Armed with a Konica Minolta digital camera, a Nextel phone that looks like a walkie-talkie, and a few individually wrapped Tucks in the breast pocket of his yellow Fine Jersey Leisure Shirt, Charney turns back out onto Orchard Street. He's soon distracted by a girl in a short skirt. "Money, money, money," he says as she passes by his narrow shoulder. "Did you get a look at her? She was stacked."
Charney has a reputation for picking up girls wherever he goes. One recent ad featured a girl he'd found at Dean & DeLuca. Lots of the women Charney encounters end up working for him, and not all of them in string-bikini tops. He estimates that 60 percent of the high-ranking staffers at American Apparel are female. ("Without women in my company," says Charney, "we'd be fucked.") But the boss is less a dirty old man than he is a throwback to a time of (another) sexual revolution, the seventies. And he wears his passions on his sleeve-the shirt he'll strip off as soon as look at you, exposing the wee hips and pelvic bone above his low-riding trousers. As Charney figures it, "People are attracted to the energy. I'm the electric socket and they want to plug in." Heh-heh-heh.
Dov Charney was born in Montreal in January 1969. His father is a Harvard-educated architect; his mother's a noted painter. His best friend, the architect Jordan Parnass, who now designs Charney's stores, says, "Dov's been a hustler since the day he was born." When Charney was 5, he was working the street corner with a lemonade stand. At 8, he started his own newspaper, soliciting ads and studying the workings of the printing press. By the time he got to Choate, the elite boarding school in Wallingford, Connecticut, he was buying American T-shirts-Champion crewnecks made in Rochester, Hanes Beefy T's out of South Carolina-to sell when he went home to Montreal on breaks. While he was a freshman pursuing American studies at Tufts, he persuaded his roommate Eric Ribner to put up $2,000 to start a little operation: screen-printing the school logo on T-shirts and selling them on campus. In six weeks, they'd collected $4,000. "He knew the screen printer and knew how to do it," says Ribner, now the managing director of a hedge fund in New York.
Charney dropped out of Tufts after his junior year and moved to Columbia, South Carolina, which at the time was a thriving center for garment manufacturing. There he picked up jobs to learn every aspect of the trade-from making yarn to sewing hems. He also met Julie, an exotic dancer, "and bam, that was it." As a team, they designed what is now style No. 4300. Alas, Julie went back to exotic dancing, and Charney lost his shirt, as it were, when garment manufacturing began to move offshore. He headed west to Los Angeles. Eventually, Charney launched American Apparel. His stated mission: to challenge the corporate Establishment and to prove that efficiency can be achieved without hurting the environment or exploiting an immigrant workforce (or, as he also puts it, "fucking the slaves").
His politics are complicated: He doesn't align himself with either U.S. political party. And for a guy who frequently uses Eisenhower as an adjective, he can't even vote in this country. (He arrived on a nafta visa and now has a green card.) "If we had George Bush right here and we asked him," says Charney, "he'd say he wants to push through measures to help American society maintain this continuous stream of immigration. The privilege of immigration is what makes New York so amazing.
"Do you know what it's like to have guys my age who are new to the United States? They say, 'I'm swimming with Dov,' and I'm proud to have them with me. We're making money together. Getting cars together, you know? And that's what keeps America alive, keeps it from being aristocratic and complacent." Charney takes a "low six-figure" compensation for himself (less than the average CEO makes in quarterly dividends), and in many ways, he flies by the seat of his preternaturally small pants. Retail expansion is determined solely by the success of wholesale: An American Apparel store costs anywhere from $100,000 to $400,000 to open, which comes out of the wholesale coffers. "We've stolen the money from our core business," says Charney. "And that is a beautiful thing." His formula for fusing capitalism and socialism has won him invitations to speak at Harvard Business School, the Anderson School of Business at UCLA, and the United Nations. And of course, it sells a hell of a lot of T-shirts.
Today Charney is hanging out on Ludlow Street with Luca Pizzaroni, the Italian artistic adviser and photographer he's hired full-time. After a lot of hand-slapping and shoulder-to-shoulder embraces, Pizzaroni lights a cigarette and reports that he's bought a cache of found photos. They're the kind you see under glass, gallery-style, in cases in the American Apparel stores, alongside the courtesy phone you can use to call anywhere in the States (but not Canada). "I love these," says Charney, poring over snapshots of suburban prom nights from the eighties. "I love these so much I'm getting a boner."
Just then, a pair of young guys appear on the block with bulging bags from American Apparel. Dan and Gabe are brothers; Gabe has a pierced lower lip and a vintage COKE IS THE REAL THING T-shirt on. They recognize Charney from 50 paces away and quicken their steps to approach him. (How many cool kids would recognize the CEO of the Gap?) Charney takes out his Konica Minolta and makes Gabe say his 718 phone number out loud so it's recorded. "We're opening in Williamsburg soon," he says. "You got any ideas, it's Dov, no e, like the soap without the e, at American Apparel dot net."
No one who meets Charney ever forgets him. By the time the boys look back, there he is, straddling a cheap bike on a small city street, ranting again. "The fucking Levi's jean jacket." He claps. "If you didn't have a Levi's jean jacket, you were a weirdo. That's what we're trying to do. We're trying to make icon products."
It's hard not to be persuaded when he identifies-"Ding!"-the seventeenth woman in a Classic Girl T-shirt on the streets of New York in one afternoon. As Marty Bailey, American Apparel's vice-president of operations (after fifteen years at Fruit of the Loom), says, "I may still question Dov from time to time, but I don't doubt him."
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