American Apparel: An Unusual Bright Spot

Everyone seems to think that the media only enjoys covering the doom and gloom out there in the retail world, but we’re actually happy to see at least one retailer performing well.

American Apparel just released its fourth-quarter results, and there isn’t really any bad news to report. The Los Angeles chain is still opening stores and had great numbers to report.

The 260-store chain is adding 25 to 30 new units this year. Its fourth quarter boasted a same-store sales jump of 11% and net sales rose 31%, hitting $145.6 million. Net income came in at $3.9 million, up from $3 million during the same period last year.

The retailer also recently received an $80 million investment from Lion Capital to pay of debt and fund future growth.

Probably the only dark spot out there are the lawsuits directed toward CEO Dov Charney.

Can we continue to see such great numbers from American Apparel, or do you think things are bound to change for the retailer in this economy?


6 Responses to “American Apparel: An Unusual Bright Spot”

  1. 1 DeathAtWill March 17, 2009 at 11:02 am

    Their days are numbered.

  2. 2 TR March 17, 2009 at 3:29 pm

    Oh is that so? What are your basis for that presumption?

  3. 3 william March 18, 2009 at 7:53 am

    Those retail stores get expensive….and they are in “off” locations. The 50 year real estate rule is: ANYONE WHO PAYS THE MARKET RENTAL RATES…GOES AWAY IN 3-5 YEARS !
    And we now are not in a capitalistic economy.

  4. 4 Mike March 18, 2009 at 8:49 am

    I live in Miami Beach where I have seen them expand into three stores, all within 7 minutes of my house. They are getting to be the Starbucks of clothing retailers-at least in my neck of the woods. I would be surprised to see them retain all three stores.

  5. 5 Alex March 18, 2009 at 9:33 am

    Ian – this is a tough one for your audience – they are not aware of american apparel. Steak houses? yes. In this market they will do well – they are basic, clean, soft clothing that sell for affordable prices and are hip. Their clothes are also used in hip screenprinting t-shirts since they are better shirts than what you get at walmart. As for their expansion – i would advise them to keep it slow and steady – dont pull a starbucks like Mike says above. Overall they will do well, as most retailers in the “not exuberant” market are fairing ok. Its the medium to high end retail market where I say “what are you THINKING???”

  6. 6 WmIce March 21, 2010 at 9:33 am

    Its great to see such a high margin, biz operation!
    That Tax rate of 35% is also fantastic, since we all need healthcare, lets all go out and buy some American apparel..especially at the 2 stores on Venice beach!

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