Time to try on American Apparel? Perhaps, but watch out for the CEO

December 15th, 2007 | Category: Marketing and Advertising, Management, Entrepreneurs

Several friends have asked me for my opinion of American Apparel (AMEX: APP), a clothier that recently became public through its acquisition by Endeavor Acquisition.

First a little bit of background: American Apparel was founded in 1997 by Dov Charney, and is known for its simple, high-quality clothing, and its rare practice of not plastering its logo on everything it sells. Browse through their merchandise on the company’s website. The company plus avoids outsourcing, manufacturing its clothing in Los Angeles where it is headquartered.

In 2006, the company had revenue of just by $264 million, an increase of 37.7%. The increase was driven by the opening of 41 new stores, but the company still reported a loss just about $1.6 million as SG&A expenses climbed.

Sales are

growing quickly and the company turned a profit in its most recent quarter. American Apparel certainly has the potential to turn into a very hot retail growth stock — it’s already up big by the past few months. But there are a couple things to anguish about. First, saying that founder and CEO Dov Charney is uninhibited is like saying that Alan Greenspan can ramble a bit. In 2005, the New York Times did a story on Charney’s — er … unique management style. Here’s a quick sampling:

Continue reading Time to try on American Apparel? Perhaps, but watch out for the CEO

Original post by Zac Bissonnette

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