Uh-oh: Major layoffs and cutbacks at American Apparel

Big uh-oh in American Apparel land. The embattled retailer — that has been in hot water for their controversial former CEO and leering ad campaigns — is going through a massive restructuring, per a press release out Monday. The long and short of it though, is that stores are shutting and jobs are being terminated. Eek.

The release is basically full of corporate jargon (“vertically integrated” and “re-merchandizing the product”). But what does that really mean? The Los Angeles-based company, which recently got rid of its CEO Dov Charney for new leader Paula Schneider, is ostensibly down-sizing.

“Going forward, the Company will look to add new stores in profitable fast-growing territories while reducing its footprint in unprofitable and over-saturated markets,” the release reads, along with thinning out the workforce, and enacting, “$30 million in cost-cutting initiatives.” It also notes the 20-some odd lawsuits against Charney and his associates as “meritless,” and says they’ll “pursue remedies” against Charney for his actions, whatever that means.

The struggling brand said that even after its 18-month restructuring plan, there’s still no guarantee it will stay afloat in today’s retail market without outside financial help.

Despite everything, American Apparel’s current CEO remains optimistic, all things considered.

“Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years,” Schneider said in a statement. “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.”

Schneider has a massive job ahead. According to NBC News, the company has lost a significant amount of value, from $540 million five years ago to $90 million today.

This American Apparel downward spiral has been swift, and as much as we love their perfect cotton tees, it sounds like they have a lot of behind-the-scenes stuff to figure out before we can feel really good shopping there again.

American Apparel is changing its whole way of being, thank god

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