Another day, another controversy involving American Apparel. Last week, we covered in our Retail Recap that American Apparel workers were caught smashing a piñata of CEO Paula Schneider’s face.
The reason? According to the video blurb, which was posted by an account named Save American Apparel, "workers have experienced a 50% loss in wages, loss in benefits, continued to work furloughs, and have seen their work farmed out to sweatshops outside of AA.“
Earlier this year, we covered Schneider’s aggressive plans to turn the brand around financially and structurally. At first blush, it seemed like she had the appropriate steps in place to make positive changes. Following this video’s release, the RTP team is sharing their feedback on whether the brand can truly recover:
Debbie Hauss, Editor-in-Chief: The American Apparel CEO probably did irreparable damage to the company and the brand. The executive team handled troubleshooting badly, so the future of the company doesn’t look good right now. Sometime when a brand seems too successful to fail, that’s when people put their guard down and fail to see the reality of a desperate situation. I think the overall brand concept is still a good one, and I imagine some smart executives are thinking of ways to reintroduce it under a different banner.
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Alicia Fiorletta, Senior Editor: When we first covered Schneider’s turnaround plan, it seemed like her heart and mind was in the right place. However, there’s an internal company culture that has evidently been damaged. This undoubtedly will have an impact on employee sentiment, satisfaction and loyalty. This is just another nail in the coffin for American Apparel, which has been struggling financially for a long time.
Rob Fee, Managing Editor: Although plenty of retailers have emerged from rough periods and moved on to strong futures, things are looking pretty grim for American Apparel. Its previous CEO did the brand no favors, and its current one has to deal with employees bashing a piñata of her and a stock that’s down 82% this year. Not good signs. With interest payments looming that, as of now, it appears the brand cannot cover, I’d be pretty surprised if American Apparel makes it out of the year.
Glenn Taylor, Associate Editor: I think American Apparel already was in too deep by the time the company shook up their CEO situation, but I think it’s too early to specifically judge Schneider’s time there. A turnaround from American Apparel will likely require much more than a quarter’s worth of institutional change, which is all we’ve really seen out of the new regime. Company morale appears to be at a low point, so that is certainly not encouraging, but I would like to see what kind of results the financial cuts will bear over the next 18 months.
Do you think American Apparel can turn itself around? Share your thoughts in the comments section below!
