Online giant Amazon and Forever 21 are bidding to buy teen retailer American Apparel. Employees are bracing for the worst. Security has been ramped up at the Los Angeles headquarters, where the company employs more than 3,000 factory and administrative workers. Notices about career training and job placement have been posted in elevators.
American Apparel filed for Chapter 11 bankruptcy in the US in October 2015. American Apparel, based in Los Angeles, began as a wholesale T-shirt business in 1998. It eventually built an image around provocative advertising for fashionable merchandise. But the hoped-for turnaround of the clothing manufacturer and retail chain—which has long grappled with shrinking sales and an outsize store footprint—did not happen. A plan to improve online selling didn't pay off, and, at a time when shoppers are going online in greater and greater numbers, American Apparel watched its online sales fall.
The brand has 110 stores in the US and 83 others around the world including UK, Ireland, Germany, Spain, Canada, Japan and Australia. The UK stores have been shut. At least eight US teen retailers have filed for bankruptcy in the past two years as the spending habits of young people shift and they visit malls less often.