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American Apparel: Drowning in Debt?

By:   •  July 5, 2019  •  Essay  •  549 Words (3 Pages)  •  1,628 Views

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The case that I have decided to use for my final project is the American Apparel: Drowning in Dept. As I reviewed the material, I identified threads, opportunities, weaknesses and strengths of the company. 



  • Recession                                                            
  • High competition from other brand with high financial resources
  • Problems created because was required to terminate the employment of 2000 workers



  • New market opening up
  • Products appealed to the young



  • Irregularities in the identity documents of workers
  • Costly loans 
  • Negative public image (several lawsuits on sexual assault and harassment).
  • Increasing the cost of products 
  • Difficulties transitioning to e new distributing center.



  • Growing strategy
  • Unique design
  • Quality product 
  • Advertising and branding 
  • Speed to market
  • Various demographics customers  

Internal environment 


American Apparel had a great mission, and they were very successful for many years. What they did well was their growing strategy plan, enhancing stores worldwide, online sales platform. What made them stand out was their unique design, quality of their products and trendsetting clothes. They responded very quickly to market changes and customer needs, also the founder, Charney, had a sense of business and great style. He got many awards, and the American Apparel was placed as the Top Trendsetting Brand, after Nike (Metah, A. 2016, April 14). The problem of American Apparel started when a federal investigation uncovered irregularities in the identity documents of workers (Metah, A. 2016. April 14). In this point started all the problems for the company, which I see as a weakness from the department of human resources. Moreover, the increasing of the cost of products, loans with high rate caused the company increased the loss. 


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