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can american apparel recover from bankruptcy? October 7, 2015

Posted by nicholas gill in advertising, thought leadership.
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Article I penned in The Drum on how American Apparel can recover from bankruptcy following lurid accusations in the boardroom, porn as advertising and poor performance at the tills.

Recovering from bankruptcy is the easy part.

There have been plenty of resurrection stories down the years with some big names surviving because of their importance to the national economy – American Airlines, General Motors.

Or those brands that survive and learn from it, coming back stronger and better with a renewed energy, work ethic and a revitalised core that is true to the brand, business and customer – Chrysler, Jeep, Aston Martin (several times now).

Then there are are brands that have come back from a seemingly never-ending downward spiral in results because of smart leadership changes, strategy changes, product changes and a deep-rooted love of the brand in the public – look at Marks & Spencer.

And then there is American Apparel. A brand whose founder has been dogged with allegations and whose advertising went beyond provocative into the lurid, disturbing murky waters of overt sexualisation and pretty much porn as advertising. The decisive change was not the filing for bankruptcy this week, it was the removal of the controversial CEO Dov Charney last year.

Sales are down, shops are closing. American Apparel made some bad choices. A lot of bad choices. Not least of which was Charney turning up to a meeting allegedly wearing nothing but a strategically placed sock. I don’t believe that was in Dale Carnegie’s playbook on ‘How to Win Friends and Influence People’.

Yet the brand allure remains strong. The crazy guy at the top did some incredible things like making sure every garment was produced inside America to truly live up to the brand name. And he did this by making sure the largely Latino workforce was well paid and well looked after. For a brand that essentially made average underwear and t-shirts, it created its own myth, fuelled by provocative porn-a-like advertising that shocked in a world we thought was largely unshockable. Ads that looked more like the edgier editorial of high-end fashion magazines played out in RHS full exposure.

This worked to cut through, but lost its edge when people realised they were paying over the odds for some average undergarments. It was undone, not by cheaper brands, but by brands that people wanted to associate with. Brands like Hollister with its sunshine California sheen with beautiful people became more culturally and socially acceptable. And better quality. And it’s not cheap either.

So how can American Apparel truly recover?

As much as possible it needs to keep the ongoing lawsuits separate to the ongoing concern that is the business and the brand. It needs to reconnect the American values, ethic, sense of doing things differently and free spirit that ignited the company in the first place, and one that continues to have consumer resonance globally. It needs a retail experience overview as it looks tired, dated and less enticing than brands like Primark.

Lastly, it needs to find the people who can mainline into the fashion industry trends and be part of the ‘must have’ list again. Preferably they will know how to wear their socks correctly.

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