The Paradox of American Apparel

September 6, 2007 —

By James Acker

American Apparel is rapidly becoming a force in the casual clothing and undergarments trade. Fifty-three stores are seeded in five countries and the company pulls in $250 million a year in sales. While it’s a large retailing operation, American Apparel has worked hard to fashion exemplary policies in environmental and social impact.

The company is largely applauded for its sweatshop-free policies and the high wages its pays its workers. Its line of briefs, t-shirts, casual wear and swimwear are made from organic cotton and other sustainable materials. Go online to American Apparel, or walk into a sizzling cool store, and you’re pretty much hit over the head with the fact that they don’t use sweatshop labor. And that’s great. The organic materials designed into edgy, body-comfortable looks are eye-catchy and eco-friendly, and American Apparel caters to the whole family as well as to the individual shopper. The workers at the firm’s apparel plants are paid double the minimum wage and are covered for health insurance.

So, what is wrong with this picture? Alongside of the praised social/environmental responsibilities, American Apparel is being criticized as being racy and openly sexual in its ads—a reflection on the company’s founder Dov Charney—known for his sexual libertarianism. It’s an interesting dilemma: socially responsible company and a socially irresponsible leader.

In a surprise move, the clothing chain announced it was to be sold to a little-known investment firm for $382.5 million in late 2006.

Choose Your Poison

American Apparel uses sex to sell—as do many clothing retailers—and its use of models with mixed ethnicity has been touted as a nod to the social pluralism. It turns out that Charney takes many of the model pictures himself—often drawing from employees or fresh amateurs. Charney has a reputation for sexual adventurism within the company and the 36-year-old has weathered three sexual harassment suits over the past few years. One was dismissed, another settled and the latest is pending. Other women haven’t gone to suit.

In an interview in a Business Week article (several articles have delved into Charney’s sexual culture) a former employee said, "I thought it was a male contemporary perspective on feminism, but it turns out to be just a gimmick...I made sure to stay away from the store when I knew [Charney] was coming into town. It's not one person—he's aiming for all women.”

Ethically, when shopping for casual wear, should the sexual conduct of its founder and CEO be a factor in buying at American Apparel? At the top of the company, women are being pursued as sexual objects—but the garment workers are viewed as dignified humans.

The choice comes down to this: Does my dollar go toward a corporate culture comfortable with sexual aggression? Or does my dollar go to another retailer that does a lot less to protect workers and the environment?