American Apparel Announces More Changes

LOS ANGELES—New American Apparel CEO Paula Schneider announces the next phase in the company’s turnaround plan, which includes a new fall merchandise line, key additions to its leadership team and a decision to close some underperforming stores.

For the first time in company history, American Apparel will roll out a new fall clothing line, limited to its retail offerings, for both men and women. The company says the line will focus on “advanced basics and key items."

"Historically, the fall season has not been a major focus for the company,” says Schneider. “We are beginning the process of re-merchandising the product assortment in our retail stores to increase productivity by SKU." She adds that, "the new styles are designed to increase revenue as we continue to evolve our product offering during this important selling season."

Schneider also announces two new hires to the executive team, including Brad Gebhard as the new president of wholesale.

Gebhard, most recently CEO of IntelliSkin, has served as a consultant to American Apparel for the past four months. He brings vast experience in the apparel industry with senior leadership, operational, and branding roles at companies including Nike, Speedo USA, Columbia Sportswear, and Adidas-Salomon.

As American Apparel’s president of wholesale, his job will be to increase the company’s imprintable and business-to-business sales. He will also oversee Oak, the New York city-based specialty retailer the company acquired in 2013.

In addition, American Apparel announces that Christine Olcu has been named general manager of global retail. She will lead the company’s current retail managers in optimizing merchandise and sales at American Apparel’s store locations. She will also facilitate the company’s fleet optimization and will work to actively improve store productivity.

Olcu has filled senior leadership roles at companies including Express, Mexx Canada Company, Indigo Books, Music Inc., and Club Monaco Inc.

Long-time manager Nicole Gabbay will continue in her role as president of U.S. retail.

"We are looking forward to working with Christine and Brad to leverage their expertise, which will be invaluable in delivering compelling products to our customers,” says Schneider. “We are proud of our heritage as the largest apparel manufacturer in North America, and the initiatives announced today are designed to enable us to return to profitability so that we can continue to serve our loyal customers and provide fair wages to our dedicated employees for years to come."

Schneider’s turnaround plan also calls for cost-cutting measures that she believes will reduce the company’s operating expenses by $30 million over the next 18 months. This will include closing an unknown number of what the company calls underperforming stores, and streamlining its workforce to reflect a smaller store footprint and what it calls “general industry conditions.” In announcing its plans, American Apparel says it will continue to add new stores in fast-growing markets while continuing to shutter stores that are not profitable or in over-saturated markets. 

Still, Schneider reiterates that she and her executive team are serious about their turnaround plans.

"We are committed to turning this company around,” says Schneider. “Today's announcements are necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability. "Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years. Our customers, employees, and local communities around the world believe that American Apparel is an iconic brand that deserves to succeed. My job is to make that a reality."


Got a news tip? Contact Alexandria Bruce