American Apparel Lays Out New Direction
On June 8, Los Angeles-based American Apparel unveiled its new strategic plan, led by Paula Schneider. In the document, Schneider laid out her vision to make American Apparel a go-to choice for socially conscious consumers, as well as increasing revenue to $1 billion by selling domestically manufactured, high-quality items. The document also laid out new advertising techniques, a multi-year strategic turnaround plan and product developments.
In the plan's first section, titled "Chaotic to Iconic - American Apparel's Future," the company states that it's mission is "to be a financially sound, socially conscious, iconic brand that provides high quality American made products to consumers while maximizing stakeholder value."
Under the direction of Schneider, CEO of American Apparel effective January 2015, the company's management believes that it can earn between $125-150 million in earnings before interest, taxes, depreciation and amortization (EBITDA).
The plan also lists the company's shift from its old advertising campaigns, which it describes as including "nudity and blatant sexual innuendo," "inappropriate sexual pose," and "offensive to many." Looking forward, the company will use models it describes as "confident and naturally beautiful from 16-60," "racially universal" and "still natural without makeup and airbrushing."
The goal is to reach millennials not simply by using age, but by capturing the millennial spirit of individuality and self expression. The document calls the campaign as "inspiring, because anybody can be beautiful enough to be a model."
The company listed key initiative areas for its multi-year strategic turnaround plan, including product development, retail store productivity, e-commerce and wholesale optimization. These product development points include reducing SKUs by 30 percent, building the company's first demand planning and forecast function, developing additional fabrics and wholesale styles, adding design staff to address design, quality and fit issues, and improving speed to market.
American Apparel has moved forward with its e-commerce initiatives by hiring a chief digital officer, redesigning its site and adding a native mobile app. For distribution, the company plans to improve the layout of its La Mirada, Calif. distribution facility, consider international fulfillment and invest in new programs to reduce time between sales order and fulfillment.