abhishreshthaa
Abhijeet S
SWOT ANALYSIS ON American Apparel : American Apparel (AMEX: APP) is the largest clothing manufacturer in the United States.[4] It is a vertically integrated clothing manufacturer, wholesaler, and retailer that also performs its own design, advertising, and marketing. It is best-known for making basic cotton knitwear such as T-shirts and underwear, but in recent years it has expanded—to include leggings, leotards, tank tops, vintage clothing, dresses, pants, denim, nail polish, bedding and accessories for men, women, children, babies and dogs.
American Apparel was founded in 1989 by Canadian Dov Charney, who had a long history with T-shirts and a fascination with American culture. It was during Charney's freshman year at Tufts University that the company took on the name "American Apparel" and began to experiment with screenprinting, importation and other parts of the apparel business. In 1997 after a variety of iterations, including a period of manufacturing in South Carolina, the company moved to Los Angeles. Charney began to sub-contract sewing with Sam Lim who, at the time, had a shop with 50 workers under the Interstate 10 freeway in east LA. Months later the two became partners. In 2000 American Apparel moved into its current factory in downtown Los Angeles where it continued to grow primarily as a wholesale business, selling blank T-shirts to screenprinters, uniform companies and fashion brands.
After its success as a wholesale brand, the company moved into the retail market. The company was ranked 308th in Inc.'s 2005 list of the 500 fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over US$211 million.
Strengths
* Solid financial position
* Good quality clothing
* Good looking employers
* Loyalty to customers and clothing
* Effective marketing strategy
* Strong market position
* Good reputation - brand recognised
* Committed stockholders
Weaknesses
American Apparel was founded in 1989 by Canadian Dov Charney, who had a long history with T-shirts and a fascination with American culture. It was during Charney's freshman year at Tufts University that the company took on the name "American Apparel" and began to experiment with screenprinting, importation and other parts of the apparel business. In 1997 after a variety of iterations, including a period of manufacturing in South Carolina, the company moved to Los Angeles. Charney began to sub-contract sewing with Sam Lim who, at the time, had a shop with 50 workers under the Interstate 10 freeway in east LA. Months later the two became partners. In 2000 American Apparel moved into its current factory in downtown Los Angeles where it continued to grow primarily as a wholesale business, selling blank T-shirts to screenprinters, uniform companies and fashion brands.
After its success as a wholesale brand, the company moved into the retail market. The company was ranked 308th in Inc.'s 2005 list of the 500 fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over US$211 million.
Strengths
* Solid financial position
* Good quality clothing
* Good looking employers
* Loyalty to customers and clothing
* Effective marketing strategy
* Strong market position
* Good reputation - brand recognised
* Committed stockholders
Weaknesses
- Controversial marketing strategy--pictures are too provocative
- Non-committed employees
- High cost structure
- Over priced
- Limited customer base (ie too narrowly focused)
- Stores are over crowded
- Poor lighting in stores
- Loud music in stores
- Anti-American culture
Opportunities
* Online-commerce business
* Create discount stores
* Emerging markets growth for new customer types
* Expand product/service lines
* Expand internationally outside US/Europe core
* Expand limited store outlets
Jobs
Threats
* Competition from other apparel players at the low & high end of the spectrum (i.e., GAP, J.Crew)
* Cyclical economic changes
* Economic slowdown
* Rising costs of raw materials, commodity prices
* Change in consumer preferences
* More competitors arrive in the retail industry
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