American Apparel to Close Some Stores, Reduce Workforce

by Christopher Blomquist
American Apparel Limited Edition HRC #EqualityForward T-Shirt
American Apparel Limited Edition HRC #EqualityForward T-Shirt

The changes continue to unfold at American Apparel.

The embattled Los Angeles-based clothing brand announced today that it will close underperforming stores and reduce its workforce in an attempt to lower operating expenses by approximately $30 million in the next 18 months. It did not say how many stores will be shuttered or how many employees will be let go.

As of March 31, 2015 the brand operated 239 retail stores in 20 countries and employed approximately 10,000 people.

American Apparel is also focusing on redesigning its fall merchandise in an attempt to drive growth.

“We are committed to turning this company around. Today’s announcements are necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability. Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years,” said Schneider. “Our customers, employees, and local communities around the world believe that American Apparel is an iconic brand that deserves to succeed. My job is to make that a reality,” said Paula Schneider, who was named American Apparel’s CEO in January 2015, in a statement.

In addition, the company announced that it has hired Christine Olcu as general manager of global retail and Brad Gebhard as president of wholesale. Olcu, who previously worked at Express, Mexx Canada and Club Monaco, will guide the brand’s retail country managers to improve the stores’ productivity. Gebhard, whose background includes senior roles at Nike, Speedo USA, Columbia Sportswear and Adidas, will oversee the brand’s wholesale operations as well as Oak, the New York-based specialty store American Apparel acquired in 2013.