Americav Apparel Case Study

Abstract

The case shows the situation of American Apparel, a manufacturing company in the United States, which also has its own brand, and an advertising concept and self-marketing. American Apparel was created in 1998 by Dov Charney in the city of Los Angeles California, in 2005 American Apparel appeared at the site of the 500 fastest growing companies in the U.S., (308) grew at a rate of 400% in three years and is valued at over 211 million. In 2006 it was purchased by endeavor Acquisition Corp. in the amount of $ 360 million, Charney continued as senior partner. Currently it is one of the largest companies in manufacturing apparel. Currently in the U.S. there are 285 stores in 20 countries (4 in Mexico) and employs over 10,000 workers with earnings of around $ 125 million a year.

Issue Identification

There are overwhelming complaints from the public that American Apparel is conveying many sexual suggestions through their marketing and advertising tools including but not limited to those indoor and outdoor post of naked models and sex insinuation slogans and in social media as well. There are plenty of concerns and sounds from the teenager parents that these revolutionary ads and commercials will wrongly lead their children to a disagreeable that younger are vulnerable to those sexually relevant hints.

• Consumers are delighted to see that American Apparel is teaching their girls the fashion trends but are extensively worried about their future.

• CEO has shown a worst case scenario of how an enterprise can cast a controversial ethical movement.

• Legal issues of several cases of sexual harassment and inappropriate foul language among his female employees and models internally.

• Millions in debt

• Damage of brand image

It was intriguing to find that despite the CEO’ s attempts to control and intimidate his female crew and models by keeping their nude pictures, and creating a hostile working environment, all of the cases are terminated outside of court (2011, January 1).

Analysis and Evaluation

American Apparel, a popular clothing manufacturer is socially open-minded; its policies include significant environmental accomplishments in its production process. In addition, it has a well-established charitable community support. Contrary to the background of these socially responsible policies, it uses a very sexy nature of advertising. This part of the marketing mix seems at least to some consumers to be causing a battle with other objectives and policies of the company. The ethical dilemma within American Apparel is a classic example showing that recognizing an ethical issue is never an easy thing. It has become a prosperous clothing and fashion company for decades and it was famous for its insistence of product quality which are offered as whole organic and “made in US.” Meanwhile, American Apparel was well-liked for its continual exploration for the optimal social conflict for its employees in terms of labor, compensation, medical care and job security etc. However, ironically American Apparel was more than once involved in unethical sexual issues such as poster sex appeal and office sexual harassment lawsuit.

Recommendations

o Develop a new human resources department base in ethics, focus in quality of selections (hiring process) and pro employees moral and values.

o Implement a new process of training that will involve education of sexual harassment at the work place to the new and old employees.

o Eliminate the entire marketing and advertising department and re-focus for a “fresh start” of the brand.

o Create a different Strategy to attract their old and new clientele

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