Over several years, American Apparel has globally distinguished itself as a hip and trendy brand. The company, created in 2003 by Dov Charney, has immensely expanded to approximately 280 stores in 20 different countries in a short period of time. How did Dov Charney and his American Apparel team manage to do such a task in such little time?

One possible answer to this question could be effective  product positioning. American Apparel holds many points of parity such as fashionable, somewhat affordable, and basic clothing (ie. sweatshirts, cotton t-shirts, etc.). However, their point of difference comes from the fact that the goods produced for American Apparel is manufactured in America. This appeals to many who oppose common unethical forms of labour used by companies in order to reduce input costs such as the use of sweat shops and child labour.

However, with such a distinct brand, how has American Apparel gone from such a promising company to one on the brink of bankruptcy in the span of two years? Firstly, the “hip” brand reputation has been diminishing as people are gearing away from this company’s fads. As a result, American Apparel is going through a process of repositioning as it attempts to move away from trendy basics and enter the more stylish and expensive realms of the retail industry. In addition, over expansion and the loss of US factory workers have also greatly contributed to this company’s downfall.