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American Apparel fights the 'made in America' fight. For how long?

Thousands have factory jobs in American Apparel's downtown Los Angeles plant. CEO Dov Charney preaches 'made in America.' But it's not easy.

June 03, 2012|By Shan Li, Los Angeles Times

While other manufacturers are fleeing the United States, American Apparel appears to be doubling down. In addition to blue jeans, the company recently added sandals and other shoes to its lineup of products — all made in house. Its slogan, "Made in America. Sweatshop Free," is prominently featured on its billboards, websites and print ads alongside sexy models (including a few porn actresses) in skimpy outfits.

Wolfgang's Vault, a San Francisco company that sells concert recordings and merchandise, buys plain American Apparel T-shirts and prints retro music designs on them. They are pricier than many competitors' but worth the extra cost, said Annelise Poda, the company's order fulfillment manager.

"They are good-quality cotton, really soft, and people really like them," Poda said. "Our designs mirror the original concert T-shirts from the '60s and '70s, which have a slim, youthful fit. The American Apparel T-shirts have that kind of fit."

Long-term outlook

Charney argues that the "made in America" model is not just a marketing gimmick but also a smart long-term strategy for retail.

American manufacturing will prove to be cost-effective as international transportation costs shoot up and overseas wages rise, Charney said, pointing to China as a prime example. "As that happens to the worldwide economy," he said, "it's going to make a lot of sense to manufacture in the United States or in Los Angeles."

Even at night, the downtown L.A. factory's huge parking lot is often jammed with cars. Light glows from its windows, and workers inside are still hunched over sewing machines.

Charney insists that the company is heading into an upswing, cautiously estimating that it may show a profit by next year. He rejects any suggestion that moving operations overseas may cure what ails American Apparel, but it's an option that analysts say the company has to consider if its struggles continue.

"In 50 years, would you say American Apparel will be around?" Charney said. "Levi's has been around for a long time, and I hope American Apparel will be around for that long. There's still lots of tricks up my sleeve."

No one knows whether those tricks will keep its factories open in Los Angeles. The company might go the way of San Francisco-based Levi's, which closed its last U.S. factory in 2003, moving like much of the industry to find cheap labor in Asia and Latin America.

Photos: American Apparel

Economists say the city would benefit from American Apparel's staying put.

"American Apparel occupies an important niche in the job market in Los Angeles," said Sung Won Sohn, an economics professor at Cal State Channel Islands and vice chairman of Forever 21. "Some immigrants qualify for high-paying jobs, and others qualify for only minimum-wage jobs. They provide employment to a lot of immigrants who don't qualify for the high-paying jobs.

"If they were to move out of L.A., that would be a shame," he added.

This is one in a series of occasional articles about California manufacturers.

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