American Apparel
Vertically integrated clothing manufacturer and retailer known for basics and vintage-inspired styles.
PE-OWNED
Acquired by Golden Gate Capital2017-01-12
What Made It Great
Made-in-USA basics with controversial marketing and vertically integrated manufacturing
What PE Will Likely Do
American Apparel's signature high-quality, made-in-USA basics will likely be replaced with lower-cost, offshore-manufactured garments to improve profit margins
The variety and uniqueness of American Apparel's vintage-inspired designs will likely be reduced in favor of more generic, mass-market styles
The company's vertically integrated manufacturing model will likely be dismantled, leading to a decline in product quality and consistency
Expected Timeline
“0 to 6 months months”
Announcements about 'streamlining' and 'optimizing' the business, with promises of 'exciting new collections'
“6 to 12 months months”
First round of store closures and staff reductions announced, leading to a noticeable decline in customer service and in-store experience
“12 to 24 months months”
Inventory levels will likely be reduced, with a narrower selection of basics and fewer unique, vintage-inspired pieces available
“24 to 48 months months”
Rumors of bankruptcy begin to circulate as the company struggles to maintain its signature product quality and manufacturing model
“48 to 60 months months”
Potential bankruptcy, restructuring, or sale of the brand to a new owner, leading to further disruption and uncertainty for consumers
Similar Cases
Other companies that followed a similar path after PE acquisition
What You Can Do
Actions
Consider stocking up on your favorite American Apparel basics before the quality and selection is likely to decline
Be cautious about purchasing American Apparel products in the coming years, as the brand's signature quality and manufacturing standards may be compromised
Stay informed about any changes to American Apparel's product offerings, store locations, and customer service to make informed purchasing decisions
Alternatives
Employee-owned warehouse retailer
Publicly traded retailer with strong values