American Apparel: Vertically Integrated in Downtown L. A.

American Apparel: Vertically Integrated in Downtown L. A.

American Apparel manufactures, produces and sells their own brand of products. The company has been innovative in its advertising and was able to distinguish itself from the competition, carving out a specific market position. However, the company has also been condemned for its “use of sex as a promotional message” (Yan and Hyllegard, 2010, p 205) and the use of young girls. To increase revenue, American Apparel has worked to deviate from the image they initially created and are working to reimage the company with a preppie look and strong vertical integration with their approach to brand.

Synopsis of the Case

American Apparel began as a small company selling T-shirts retail in the U. S. and then moved into Canada and 18 other countries. In July 2010, the company’s auditor resigned after discovering material weaknesses (Casey, 2008) in the company’s financial records. The mounting losses during 2010 led American Apparel to issue a bankruptcy warning. (Casey) After several setbacks and recovery, the company moved towards vertical integrated. This move integrated T-shirt production and supply chain management at their facilities located in downtown LA. Last month the company announced that it was moving to “distance the brand from its controversial founder, Dov Charney” (Covert, 2015).

Relevant Factual Information about the Problem or Decision the Organization Faced

American Apparel’s primary customers were screen printers who purchased t-shirt blanks to print their designs and logos and marketing the American Apparel brand retailed products. The company’s vertical integration encompassed most stages of production at its large Los Angeles headquarters. The company maintained its own accounting, design, marketing, distribution, and manufacturing divisions. American