American Apparel Research Report

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American Apparel Research Report FIN-643 May 14, 2012 American Apparel (AMEX: APP) is a clothing manufacturer in the United States. It is a vertically integrated clothing manufacturer, wholesaler, and retailer that also performs its own design, advertising, and marketing. American Apparel was founded in 1989, by Canadian Dov Charney. Don had a fascination with American culture and the T-shirt. It was during Charney's freshman year at Tufts University that the company took on the name "American Apparel,” which actually wasn’t named by Charney. It was there when he began to experiment with screen printing, importation and other parts of the apparel business (Charney). In the beginning, Charney imported Hanes T-shirts to Canada. He was a grey marketer of Hanes T-shirts before he started making his own T-shirt. Charney would buy the shirts in the USA, sometimes from Kmart during cyclical sales, when they would sell the goods at cost, and then bring them into Canada and undercut the Canadian distribution channel. He was also buying irregulars of the Hanes Beefy-T and selling them to tie dyers and garment dyers in Canada (Charney). In 1997, after a variety of repetitions, including a period of manufacturing in South Carolina, the company moved to Los Angeles (Nieder, 2000). Charney began to sub-contract sewing with Sam Lim who, at the time, had a shop with 50 workers under the Interstate 10 freeway in east LA. Months later the two became partners. In 2000 American Apparel moved into its current factory in downtown Los Angeles where it continued to grow primarily as a wholesale business, selling blank T-shirts to screenprinters, uniform companies and fashion brands (American Apparel, 2012). After its success as a wholesale brand, the company moved into the retail market. The company was ranked 308th in Inc.'s 2005 list of the 500 fastest growing

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