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American Apparel Nominated by: SEAMSApparel
Founder and Senior Partner, American Apparel
A Little-known Fact about American Apparel: "A reason for the company's success, not pointed out by journalists, is that we have an excellent art and design department. We have a good team. Where we're placing our stores is also making a difference. It's not always all about our social-conscious and anti-establishment ideas: sweatshop free, shirts being logo free, slick advertising, etc. We know have good ideas. But fundamentally, it's about our product.'
For an apparel industry in need of a feelgood story, the well-publicized tale of American Apparel has been appealing on several fronts. Chronicled in cable news shows and newspapers (including The New York Times) and splashed on the front covers of magazines, it's a story that offers many angles.
First and foremost, American Apparel's success at bucking the offshore trend has been perhaps the biggest headline grabber. In an era ofoutsourcing, the vertically integrated manufacturer has built a "Made in America" T-shirt empire in just five years out of its downtown Los Angeles operations.
Its 800,000-square-foot cut-and-sew L.A. facility is now considered to be the largest of its kind in the United States. Increasingly, the company is setting its sights on retail mastery to match its manufacturing success, recently opening stores in New York, Toronto and throughout Europe.
Selling basically designed but high-quality logo-free T-shirts to the tune of 1 million pieces per week, American Apparel's sales have exactly doubled every single year of the past five, from $5 million in 1999 up to $80 million last year (its 2004 projections set the company's target at around $150 million in sales revenue).
The second appealing element of the story is how American Apparel's success has been achieved. Vociferously promoting a sweatshop-free consciousness, the company employs about 2,500 workers while paying average wages of $13 per hour, offering free English-language classes, massages and subsidized lunches along the way.
Some who have followed the story also have been intrigued by the rags-to-riches tale of the company's flamboyant and outspoken founder and senior partner, Dov Char-ney, a 35-year-old dynamo originally from Montreal. An Ernst and Young Entrepreneur of the Year award winner, Charney learned about garment and T-shirt manufacturing in then-thriving South Carolina in the early '90s, before moving to Los Angeles to impart his craft. He arrived in L.A. "with only a cell phone" and a stated mission: to challenge the corporate establishment without hurting the environment or exploiting an immigrant work force.
"I don't think outsourcing is necessarily always bad," Charney said during a recent interview from his home. "But it can create an environment that dehumanizes labor and moves various processes from the company in such a way that dehumanizes the entire experience ... I think there's a cost to that. And it's something we're doing different here,"
The company actually attributes growth to its shunning ofoutsourcing, stating it has achieved efficiencies through consolidated operations. Core components of the American Apparel business model are expensive but resolute warehousing standards (it keeps 2,000 pounds of fabric on hand at all times to ensure quick turnaround) and a reliance on modular manufacturing principles that reward the team effort of employees. "Forget about. how much they make or the massages or any of that," says Charney, when asked about the relatively generous enticements to employees for which he is known. "It's not always about that. It's about: What kind of experience do the employees have? It's important that they go home feeling like part of something important, that they're making a contribution. That's our obligation."
The story is not without its controversial elements; the charismatic Charney has orchestrated an aggressive advertising campaign targeted at its youth-cultured market, selling equal amounts sex, rebel-lion and social message. "He's simply the most amazing marketer I've ever been associated with," explains Marty Bailey, American Apparel's vice president of operations, who has 20 years of experience in the apparel industry.
Targeting a youth market, American Apparel is producing approximately 1 million T-shirts per week. The company says a no-logo but high-quality design is a top selling point.
Amid all those publicized pieces of the American Apparel story, however, Charney says the most important aspect is often overlooked: the product.
"It's really about the quality of the T-shirt," he says. "That sometimes gets lost in the hoopla. It's partially our own fault because of all the [social] messages we've sent out, and we're going to move away from that. But I spend an enormous amount of time making sure these T-shirts fit right. They're well designed and well made. They really appeal to people's sense of what they want from a point of view of function, and from a point of view of making them feel good."
Made in Downtown LA—Vertically Integrated Manufacturing