American Apparel
SWOT Analysis
Marketing 304 Section 12382

Group# 5
Nancy Alonzo
Yavon Irving
Salvador Bustos
Cory Lashinsky

American Apparel is a vertically integrated clothing manufacturer, wholesaler, and retailer. AAI is best known for making basic, solid color T-shirts and undergarments. They have expanded into dresses, denim, bedding, pants, and accessories for men, women, children, babies, and dogs. Their long-term goal it to become the #1 destination for basic apparel – the first name that consumers think of for t-shirts, sweatpants, underwear, socks, etc.
What sets American Apparel apart from other clothing companies is that every aspect of their production takes place in the center of Los Angeles, California,
Women’s denim jeans are priced around $80. They also sell jewelry, eyewear, shoes, belts, bags, and other accessories.
While AAI manufactures its products out of one central location in Los Angeles, California, they sell their products globally through wholesale markets, retail, and online. The growth of the company was promising with sales increasing steadily each year. In 2006, the company ranked number 308th on INC. 500’s list of the nation’s fastest growing private companies with annual revenue of 211 million. According to the audited financial statements of American Apparel filed with the Security Exchange Commission, sales from 2005 to 2009 had been steadily increasing. Net sales increased an average of more than 39 percent from 2005 until 2008. In 2009 the sales slowed down increasing only three percent from that of 2008. 2010 was the first year the company had experienced a decrease in overall net sales since the start of the company. It was also the first year the company reported a loss of income from operations, a loss in net income, and a basic loss in earnings per share.
In 2010, American Apparel ended the year with total consolidated net sales of 532,989. This was nearly a five percent decrease from net sales in 2009. Reviews of the financial statements indicate that overall sales had declined in every geographic location with the exception of Korea, Australia, and other foreign countries. Additionally the cost of sales