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
Thursday, May 12, 2011
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.
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
Here's the pictures of them. Enjoy!
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
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
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
Tuesday, April 26, 2011
[news] American Apparel Secures $14.9M From Rescue Financiers
April 26, 2011, 11:47 A.M. ET
By DREW FITZGERALD
American Apparel Inc. said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private-equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being.
Shares slid 11 cents, or 7%, to $1.47 in recent trading after a halt was lifted on the stock. They have dropped 54% over the past 12 months.
Liquidity problems have dogged American Apparel for most of the past year amid declining sales. The company first warned in May that it could fall out of compliance with its debt covenants before it narrowly averted a default.
Under the deal, the company will sell about 15.8 million shares of common stock at 90 cents a share to a group of private investors led by Serruya, the former chief executive of Canada's CoolBrands International Inc. The investors also can buy an additional 27.4 million shares at the same price within 180 days, subject to certain adjustments. The price represents a 43% discount to Monday's close. The company had about 73.8 million shares outstanding at the end of last year.
Meanwhile, American Apparel Chairman and Chief Executive Dov Charney will buy 800,000 more shares at the same price with the option to buy about 1.6 million more shares.
"We believe in the American Apparel brand and we believe in Dov Charney," Mr. Serruya said. "We are convinced that with adequate resources, Dov and his experienced management team will lead American Apparel to new heights."
Media reports had speculated the latest rescue amount could have been as low as under $10 million or as much as $43 million.
After Tuesday's financing, the retailer would still need to raise another $5 million to $10 million to survive, based on estimates The Wall Street Journal reported last week. The company hopes that an improving economy may limit any need for additional funds.
The company is still discussing amendments to its credit agreements with lenders Bank of America Corp. and Lion Capital. The Bank of America amendment is expected to increase American Apparel's minimum excess availability requirement to $12.5 million from $7.5 million, while the Lion amendment will likely expand Lion's anti-dilution protections with respect to its warrants. The amendments also are expected to waive the requirement that the year-end audit for fiscal year 2010 be provided without a "going concern" or similar qualification.
At the end of February, American Apparel had $5.3 million in cash, down from $7.7 million at the end of December, according to regulatory filings. The company recently warned it may not have sufficient liquidity to sustain operations and to continue as a going concern.
From The Wall Street Journal, online.wsj.com
By DREW FITZGERALD
American Apparel Inc. said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private-equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being.
Shares slid 11 cents, or 7%, to $1.47 in recent trading after a halt was lifted on the stock. They have dropped 54% over the past 12 months.
Liquidity problems have dogged American Apparel for most of the past year amid declining sales. The company first warned in May that it could fall out of compliance with its debt covenants before it narrowly averted a default.
Under the deal, the company will sell about 15.8 million shares of common stock at 90 cents a share to a group of private investors led by Serruya, the former chief executive of Canada's CoolBrands International Inc. The investors also can buy an additional 27.4 million shares at the same price within 180 days, subject to certain adjustments. The price represents a 43% discount to Monday's close. The company had about 73.8 million shares outstanding at the end of last year.
Meanwhile, American Apparel Chairman and Chief Executive Dov Charney will buy 800,000 more shares at the same price with the option to buy about 1.6 million more shares.
"We believe in the American Apparel brand and we believe in Dov Charney," Mr. Serruya said. "We are convinced that with adequate resources, Dov and his experienced management team will lead American Apparel to new heights."
Media reports had speculated the latest rescue amount could have been as low as under $10 million or as much as $43 million.
After Tuesday's financing, the retailer would still need to raise another $5 million to $10 million to survive, based on estimates The Wall Street Journal reported last week. The company hopes that an improving economy may limit any need for additional funds.
The company is still discussing amendments to its credit agreements with lenders Bank of America Corp. and Lion Capital. The Bank of America amendment is expected to increase American Apparel's minimum excess availability requirement to $12.5 million from $7.5 million, while the Lion amendment will likely expand Lion's anti-dilution protections with respect to its warrants. The amendments also are expected to waive the requirement that the year-end audit for fiscal year 2010 be provided without a "going concern" or similar qualification.
At the end of February, American Apparel had $5.3 million in cash, down from $7.7 million at the end of December, according to regulatory filings. The company recently warned it may not have sufficient liquidity to sustain operations and to continue as a going concern.
From The Wall Street Journal, online.wsj.com
Monday, April 25, 2011
ch.11 Developing and Managing Products
American Apparel adds and upgrades new products frequently. There are tons of new products for women in retail stores and online store recently.
For categories of new products, American Apparel's new products are included in new product lines and mostly addition to existing product lines.
-New product lines : In April 2011, American Apparel launched its first line of jeans. The first styles in the American Apparel Jeans line 'Made in USA Jeans' will be constructed of a 14 ounce denim made of 100% cotton. The company has named Georges Atlan, director of denim to oversee the launch. Atlan launched Guess Jeans with Georges Marciano back in 1980, and has over 30 years of product development, factory management, and running his own businesses. The jeans are available in standard sizing, in a full size run in two washes. They can be found online and in American Apparel stores now. The launch began with a high-waist, tapered leg blue jean for women, and a high-waist, cuffed jean short for women. The company has plans for additional washes and more styles, including a men's heavy-weight denim jean.
-Addition to existing product lines: because of their wide product mixes and many product lines, they add new products in new fabrics or new colors very frequently. In 2011, they expanded a lot of 'not-so-basic' items. For example, in the dress line, they added chiffon A-line maxi dresses in 5 colors, the siren dresses in 2 colors, and cross back knit dresses in 3 colors for s/s to name a few.
In doing so, they intend to make customers visit the stores many times because customers are aware of American Apparel's frequent updating and know there will be something new in. Also, American Apparel tries not to loose customers' interests in their stores. As a customer myself, I visit American Apparel stores a lot to just check out their new product.
For categories of new products, American Apparel's new products are included in new product lines and mostly addition to existing product lines.
-New product lines : In April 2011, American Apparel launched its first line of jeans. The first styles in the American Apparel Jeans line 'Made in USA Jeans' will be constructed of a 14 ounce denim made of 100% cotton. The company has named Georges Atlan, director of denim to oversee the launch. Atlan launched Guess Jeans with Georges Marciano back in 1980, and has over 30 years of product development, factory management, and running his own businesses. The jeans are available in standard sizing, in a full size run in two washes. They can be found online and in American Apparel stores now. The launch began with a high-waist, tapered leg blue jean for women, and a high-waist, cuffed jean short for women. The company has plans for additional washes and more styles, including a men's heavy-weight denim jean.
-Addition to existing product lines: because of their wide product mixes and many product lines, they add new products in new fabrics or new colors very frequently. In 2011, they expanded a lot of 'not-so-basic' items. For example, in the dress line, they added chiffon A-line maxi dresses in 5 colors, the siren dresses in 2 colors, and cross back knit dresses in 3 colors for s/s to name a few.
What's New
American Apparel has started to offer more deals- you can earn a stamp for every basic you buy from American Apparel. If you earn 10 stamps, you'll get $15 to spend on whatever you like.
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