The recent trend for eccentrically coloured leggings and leotards has been a boon for quirky fashion brand American Apparel. However, its financial results offer little cause for excitement.
Operating 280 stores in 20 countries (including eight in the UK), the US clothing company seems to relish the controversy generated by its self-consciously edgy marketing.
Last year an American Apparel press ad showing a semi-naked young woman was banned by the ASA. Although the company insisted that the model in question was 23 years old, the regulator ruled that she looked younger than 16, this was 'irresponsible' and could cause offence.
Separately, Woody Allen sued American Apparel over an outdoor ad that pictured him as an Orthodox Jew, with the strapline 'The Highest Rabbi'.
Adding to the brand's woes, it had to fire about 1500 workers from its Los Angeles factory because of immigration irregularities. This was far from ideal for a company that prides itself on being 'vertically integrated' and, therefore, not reliant offshore labour.
These troubles would be of less importance had the brand's high profile translated into sales, but these fell in the three months to the end of March, compared with the previous year.
Where does the brand go now? We asked John Paul Cadman, strategy director at Mediaedge:cia, which handles Next's media planning and buying, and Nick Gray, managing director at Live & Breathe, and a former marketing director at Ben Sherman.
JOHN PAUL CADMAN, strategy director at Mediaedge:cia
American Apparel is the subject of so much media attention – on the financial pages, as well as tabloids raking it over for rumour and scandal – that it can hard to separate truth from lies.
However, it is undeniable that the brand is inextricably linked to its founder and majority shareholder, Dov Charney. His attitude has been a significant factor in the company's success to date and helps define the brand. His involvement is evident at every level of the business and he even picks up the camera for advertising shoots.
Nonetheless, this attitude has veered toward recklessness of late and caused significant problems, specifically in relation to immigrant workers, an issue on which American Apparel has always been vocal.
From an outsider's perspective, its marketing lacks a coherent vision, with visuals seemingly picked on a whim, based on their ability to shock, be it Woody Allen shown as a 'rabbi' or models who look underage.
Assuming it survives the current financial turmoil, the marketing challenge will be to balance edginess with offensiveness on a global stage.
Remedy
- Become more transparent. A few stills from the factory posted on the website isn't enough counter the barrage of overwhelmingly negative PR. Turn it into a conversation.
- Focus on the product, bearing in mind that it was great basics that helped the company grow. It's time to make sure this is still the case and that they are seen on the right people.
- Reconsider the role of Dov Charney in communications. He needs to be less vocal about controversial issues that can damage the brand.
NICK GRAY, managing director, Live & Breathe
Talking about American Apparel is difficult to do without also discussing Dov Charney, the company's chief executive, because his attitude permeates the brand – from its advertising through to the clothing staff have to wear.
Indeed, that is the crux of the problem. Charney was lucky that American Apparel's range of utilitarian/sex-garment products were 'of the moment', but that moment has passed. The brand's styling and look hasn't evolved, as it always needs to in fashion.
The ads that came in for so much criticism were basically soft porn justified by business. They were reflective of the business as a whole, where things are done for Charney's own gratification as much as they are to sell clothes.
Value is about more than just price. Experience and quality comprise the rest of the equation, and shoppers can find better from other similar high-street chains. I imagine also that shoppers go there for accessories, as opposed to buying a whole outfit, which makes it difficult to increase basket spend.
Remedy
- Charney should step back and work at a level where his attitudes interfere less with business goals.
- The shopper and business world would take American Apparel more seriously if Charney stopped using the brand as his plaything. Being a maverick in fashion is good up to a point, but if it means the business is suffering, it is time to rein it in.
- The relaunched vintage-inspired line is a good start on the road to recovery. The "hand-selected collection of 100 pieces" available in American Apparel's online store will help give what is a pretty boring product the individualism it desperately needs.