The clothing company American Apparel began its decline in 2008 and has only begun to sink in deeper into debt since then. Their largest current liability lies under the account “Current Port. Of LT Debt/Capital Leases” where it shows that a debt of $369,300 from 2008 rose into $1,394,000 in 2010. Some of the reasons that are the cause this great financial debt and American Apparel’s overall growing state of bankruptcy could be: the rise in cotton prices for the making of their cotton clothing, their mid-priced basics that may be overpriced to some due to the long recession, and not to mention the fact that fashion itself isn’t such a big thing when you’re short of cash from recession. American Apparel also expanded their stores to over 100 in the last few years, nearing 280 stores in total, so perhaps having expanded too greatly in such short years also added to their struggle with cash and income. CEO Dov Charney himself blames the American government for removing over 1,500 of his employees for not having proper immigration documents, especially when those employees haven’t even left United States after being forced to quit American Apparel.
I think that the $14 million would be best put to use in appealing to customers, especially because of all the sexual scandals surrounding Dov Charney, right now American Appeal really needs to do better with the media than its CEO. Better ads than near-nudes like continually promoting the fact that all the clothing they make are made in America and not by sweat-shop labourers will always be a nice incentive for those who are looking at American Appeal’s current type of suggestive picture-ads and shaking their heads. That is but one of the possibilities of use the $14 million could be put to in commercializing to the public.
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