American Apparel's New Image

By: Rob WalkerFri May 9, 2008 at 5:06 PM

Employees at the American Apparel's Los Angeles factory. | photograph by Jeff Minton

In the beginning, American Apparel put a "sweatshop free" label on its t-shirts. But sex turned out to be a better sell than good labor practices. Lessons in the limits of altruism.

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Provocateur: CEO Dov Charney, makes no apologies for American Apparel's racy image. | photograph by Jeff Minton

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Although very few of the subjects made the connection, the researchers concluded that "the opportunity to appear altruistic by committing to a charitable act in a prior task" gives us license to choose a luxury item. A similar set of studies indicates that subjects are more likely to splurge on fancier sunglasses or pricier concert tickets after giving to charity. If you buy ecological or green products or consume alternative health care or practice yoga, it's easy to conclude, "Hey, I've done my part."

Perhaps this is why many big companies and brands are not so much changing their products as adding new alternatives to their existing product mixes, or carving a small donation to charity out of their profit margins. Pepsi-Cola is testing an all-natural version of its flagship drink called Pepsi Raw, and Clorox has launched an eco-friendly line of cleaning products. The Bono-promoted (Product) Red initiative brands existing products that dedicate a portion of the purchase price to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. There's even a (Product) Red version of the iPod.

These efforts add just enough options to the miles of retail shelves to give us all an ethical fix -- to do our one good shopping deed. Then we can push our basket a little farther down the aisle, letting other rationales take over: Here's a bargain, here's a great product, here's something that I could probably get cheaper elsewhere, but as long as I'm here, I'll just get it -- and here, yes, here is something ethical. I'll take one of those, too.

From sweatshop-free to skintight

American Apparel's approach to ethical behavior in the marketplace has evolved into something very different. The company has moved from a sweatshop-free image that appealed to a relatively small group of consumers to a much bigger customer base that may not know a thing about where or how the company's products are manufactured.

By the time I visited American Apparel's headquarters and factory in Los Angeles to meet with Charney a second time, the company had transitioned to an image soaked in youth and sex. This was apparent in its stores -- where the decor often included things such as Penthouse covers -- and in its print ads. Yes, some of these ads mentioned quality and the sweatshop-free angle, but usually in small type, under a photograph of a half-naked young woman. Charney himself had been sued by three former employees for sexual harassment. (Those suits were dropped or settled; a fourth case is still pending.)

The company's -- and Charney's -- image had gotten so much attention that nobody seemed to bother checking into how its actual business might have changed. So I met with Marty Bailey, the company's vice president of operations. Quiet, serious, soft-spoken, and fully clothed, Bailey was an industry veteran who had begun his long education in manufacturing efficiency -- and the hard realities of globalization -- with Fruit of the Loom more than 20 years earlier. He had come to see offshore outsourcing as a mixed proposition. He believed that its promised labor savings had been diluted by the costs of moving materials to the cheap-labor haven and back, and by sacrificed quality. He believed that with the right plan, a U.S. manufacturer could still make money.

American Apparel's factory was, he reckoned, the 41st manufacturing facility he had walked into with the mission of improving efficiency. The company was producing 32,000 pieces a day and struggling to keep up with orders. In months, Bailey's system was churning out 90,000 pieces a day and would eventually reach 250,000. While the company was projecting an air of almost reckless decadence in its ads, it was quietly building a thriving made-in-America business model.

Its ads may have a decadent air, but its business model is thriving.

Eventually, I ended up in Charney's office, just in time, it would turn out, to witness an underwear fitting. He had concluded that -- whatever the polls might say -- ethical consumers were a niche. And he wasn't going to sell as many T-shirts as he wanted by targeting a niche; he wanted a generation. "We make sexy T-shirts for young people," he summarized.

Charney maintained that his provocative advertising, which some have called soft-core pornography, is honest. The women in the ads weren't models; many were customers and a few were employees. "Young people like honesty," he said. (Earlier, a member of the company's marketing department had showed me images that customers themselves sent in, essentially auditioning to be in the next squalid American Apparel ad.) He avoided the strategy of a logo that would broadcast status: an eco-badge, a cool badge, or any other sort of visible badge. His T-shirts had more to do with personal narratives than with impressing strangers. Finally, as Charney pointed out, the new image had hardly alienated young women; they were the main driver of his sales.