Thursday, May 12, 2011

[news]American Apparel 1Q Loss Narrows On Margins, Online Sales Growth

May 10. 2011
From Wall Street Journal, online.wsj.com


DOW JONES NEWSWIRES

American Apparel Inc.'s (APP) first-quarter loss narrowed on expanding gross margins and rising online sales, as well as a larger income tax provision in the year-ago period, although same-store sales declined.

The casual clothing retailer, known for its risque marketing campaigns and colorful basic clothing, has struggled with liquidity woes and weak sales. Last month, the company managed to raise $14.9 million in rescue financing from a group of investors allowing it to meet obligations to its lenders.

On Tuesday, American Apparel said same-store sales in the latest quarter dropped 7.9%, although online sales grew 28%. The company said same-store sales were essentially flat so far in the current quarter, and it still expects to achieve growth on that basis for the full year.

"Our first quarter financial results demonstrate early signs of recovery," said Chairman and Chief Executive Dov Charney. He added the company's inventory was well positioned for American Apparel's key selling season, which runs from May through October.

For the latest quarter, American Apparel reported a loss of $20.7 million, or 28 cents a share, compared with a prior-year loss of $42.8 million, or 60 cents a share. Net sales dropped 4.7% to $116.1 million.

Gross margin widened to 55.1% from 50.4% due to improved production efficiency, which began in the second half of last year. And while yarn and fabric costs grew, American Apparel raised average unit retail prices to mitigate the increases.

Shares rose 2 cents, or 1.6% to $1.30 in after-hours trading Tuesday after closing up 4.9%, or 6 cents, to $1.28.

--By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

Tuesday, May 10, 2011

ch7. Business Marketing


 A politically attractive sweat-shop-free business model and a superior product that was competitively priced helped Charney, CEO of American Apparel, carve out a niche market among T-shirt wholesalers. The company found particular success as a supplier of T-shirts to rock bands, who screen-printed their logos onto the shirts and sold them at concerts and online. American Apparel first became profitable in 2000, and the company nearly doubled its sales growth and employee force each year thereafter, eventually adding new products, such as tank tops and women’s underwear.
 For those business customers, American Apparel has the online store just for wholesale so customers can order online or download their latest print catalog, or receive up to 3 free print catalogs by mail.
 American Apparel’s business customers are mostly producers. American Apparel’s t-shirt line is widely sold by graphic designers to print their designs on it. Also music bands print their pictures and logos on the products. Colleges buy their product to print their logos on and sell those in their college souvenior shop.
 The company’s business products are component parts because their products usually are  just printed on and then get ready to be sold. At the same time, it can be processed materials used directly in manufacturing other products.
 According to the text book, MKTG 4, business buyers evaluate products and suppliers against three important criteria: quality, service, and price.
-Quality: By their business model, vertical integration, they are proud of the products made in the USA by highly skilled workers they consider their friends and family. Most of their customers insist that the quality is good and all their clothes fit really well and are worth the money. Their wholesale products come in more than 100 colors.
-Service: American Apparel offers 2-3days air delivery at ground rate in most states in the US. With discounted air, orders going to select East coast locations will arrive from their Los Angeles headquarters in just 2-3 days at no additional cost. There is no minimum order requirement. They also have a lot of flexibility when it comes to custom orders, including the ability to use custom patterns, stitching, colors, and fabrics. With each custom order, they will send the customers a sample before they start full production. They will not begin production until customers are completely satisfied with.
-Price: currently they can only give customers access to their wholesale price-list when customers have an account with them. However, customers can always call customer service and ask about their prospective cost.


Monday, May 2, 2011

ch.8 Segmenting and Targeting Markets

The fashion apparel retail market can be segmented using the following factors: geographic, demographic, and psychographic. 
American Apparel studied these factors to create segments.
 
1. Geographic segmentation
American Apparel’s retail stores are usually located in life style streets of local folk who look for the basics rather than the fancy midtown sites. also, the stores are located in college towns such as Gainesville, Fla., and East Lansing, Mich., home to the University of Florida and Michigan State University. It’s because of the company’s target market that is young urbanites who see themselves as unique instead of as part of a generic, main-stream fashion culture.
According to each place where the retail stores are located, American Apparel differs their merchandise mix. For example, in New York City, the merchandise of the shop in Columbia University area and the one in Tribeca is different. The store in Tiribeca, where there are many young married people who have a baby or babies, have much more baby products than in Columbia University.  

2. Demographic segmentation.
-Age: American Apparel mainly targets young adults of 20-35. they steer away from the under-18 age. also, they choose not to go after the popular 35-45 age bracket and people over the age of 45.
-Gender: female and male
-Income: related to the age of the target, the company knows many of this target market have entry-level jobs which means they are not making six-digit figures, but they are making less than $100,000 a year. Others are still in school and some may have started living their own lives . 
-Family Life Cycle: American Apparel targets people who are young single and young married or divorced with or without children. They focus on “young” adults because they are tend to invest in fashion.

3. Psychographic segmentation
-Personality: American Apparel targets young adults who see themselves as unique. they love to show their personality through fashion. They love to mix and match things to express their uniqueness. So American Apparel’s products which are basic but unique at the same time, apeal to them.
-Motives: as American Apparel’ is known for “Made in USA”, the company targets customers with motives that when they buy American Apparel’s product, they not only buy a hip clothing but also support to create jobs in USA.
-Lifestlyes: since the company focuses on young metropolitan adults as their target market, American Apparel produces comfortable and also fashionable items in reasonable prices. They have wide range of t-shirt lines for young adults who don’t dress up so much.

As i mentioned above, American Apparel targets,
“Young urbanites(20-35) who see themselves as unique instead of as part of a generic, main-stream fashion culture and who have disposable income.” 
The company uses concentrated targeting. For example, they advertise not only on the magazines and billboards but also on the fashion blogs that their target market can easily see. Also, their unique and eye-catching advertisements apeal to their target market. However, it may be “too unique” because a large amount of the public does not dress in the ways seen in their ads.

Sunday, May 1, 2011

Fashion bloggers and enthusiasts love American Apparel

Many bloggers and fashion lovers love to wear American Apparel in their own way.
Here's the pictures of them. Enjoy!
Name: Girl photographed by Vanessa Jackman
From: Paris
Blog Link: Vanessa Jackman
Wearing: Women's Blazer,
Chiffon Oversized Button-Up,
Velvet Full Woven Skirt
and Velvet Tassel Loafer


Name: Valentina
From: London
Blog Link: Wayne Tippetts
Wearing: Chiffon Double-Layered Full Length Skirt


Name: Annabu
From: Germany
Blog Link: Bu The Right Thing
Wearing: Chiffon T-Shirt Dress






Name: Shini
From: London
Blog Link: Park & Cube
Wearing: Chiffon Oversized Button-Up


 

Name: Victoria
From: Barcelona
Blog Link: David Gomez
Wearing: Le New Big Tee-Unisex
and Chiffon Full Length Skirt





Name: Chloe
From: Barcelona
Blog Link: David Gomez
Wearing: Chiffon Double-Layered Shirred Waist Skirt
and California Fleece Cape