American Apparel closing stores

Discussion in 'Retail' started by Cody, Dec 28, 2016.

  1. Cody


    Feb 17, 2016
    american apparel.jpg With the closures of BHS, Waitrose and various others affecting thousands of their workers - and just before the Christmas period - it's quite obvious that in this time of austerity and Brexit uncertainty, it's definitely taking its toll.

    Only recently, before Christmas it was confirmed that American Apparel have closed 12 out of their 13 UK stores.

    In total, 150 staff have been made redundant after American Apparel closed 12 of their UK stores leaving only their Camden High Street one remaining. This comes after they filed for US bankruptcy protection for the second time this year, and having raised issues in August 2015 with its finances went into administration, blaming this on tough trading conditions in the UK and US.

    Around October and December retailers on average make 40% of annual profit, however with cuts being made in the wrong places and prices soaring in rents, and the demand for higher salary the firm have been cutting all their prices to make up for this. They still haven't been able to bring in that many shoppers.

    Does this mean we can infer that shoppers are looking away from brands and moving towards unbranded cheaper/ alternative clothing as a means to save money? With stores making cuts on their prices it still doesn't appear that this has had an effect.
  2. Jed


    Feb 16, 2009
    Maybe their brand just couldn't gain the same traction in the UK as it did in the US... after all our shopping habits can be greatly different.
  3. megadanny1


    Apr 1, 2011
    Their pricing was a bit steep for the UK market, And some of their adverts were pretty tasteless. I didn't even know they had any shops in the UK

    There have been a lot of issues with this company including issues with management, A quick Google search will show. When your CEO is imbroiled in a scandal and then litigates against his former company having been fired it's never going to end positively.

    I suspect it died in the same way most retailers do. Over-extension of range,Over extension of retail footprint, Lack of adaptability/change to keep up, A couple bad trading periods, Some poor deals and the next thing your suppliers can't get trade credit insurance and are demanding cash, another poor trading period with now reduced stock/ SKU unavailability and BANG one of your secured creditors pulls the plug sending you into administration.
  4. Erik


    Sep 26, 2012
    Apparently their UK stores are just part of the whole layoff, and there are some stores in the US to be shut down:

    They said it's because of underperforming stores, but I think collectively it's the dwindling sales of their product in both the US and strongly in the UK. Nevermind the controversies the CEO has, most consumers just look at the product and care less on the corporate side. I think it's just the tide of things, how they previously marketed their products, then eventually not trying to cope up with the trend, or coming up on a trend of their own.

    They have better competitors now, Uniqlo and H&M are 2 brands getting a better reach worldwide now, and some niche markets, like CK, RL and such, will remain there as they are considered mainstays in the market. American Apparel seems to be stuck with having no identity of its own, and with some of their controversial attempts in ads to gather attention, they might have gotten it, but on a bad light, and as such, could be giving a more negative impact to their business.

    Or perhaps, they are already figuring that eCommerce should be the way to the future, and reducing B&Ms should be the next step.
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