American Apparel is a fashion retailer that makes its own rules, which has led it to grow to over 250 outlets throughout the United States, Europe, and Asia.
The strategy that American Apparel uses, which differs from other clothing retailers, is vertical integration.
Vertical Integration (noun):
the combination in one company of two or more stages of production normally
operated by separate companies.
This trend-setting approach extends from how goods are sourced—American Apparel owns its sewing, design, and dyeing facilities—to the use of advanced technology to ensure American Apparel’s full range of merchandise is available to shoppers in a timely manner.
Why do they do this?
- avoids outsourcing
- provides more work opportunities in U.S.
- provides higher pay to workers
- reduces transportation costs
- captures upstream and downstream profit margins
- improves supply chain coordination
- achieves a fast turn-around time from design concepts to finished products