American Apparel records sharp decline in Australian sales

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IN PHOTO: A woman walks past an American Apparel store in New York June 19, 2014. The company ousted its controversial founder Dov Charney as chairman effective immediately and moved to fire him as CEO and president following an ongoing investigation into alleged misconduct. REUTERS/Brendan McDermid

American Apparel, known for its slim fitting, unbranded clothes and sweatshop-free status, is facing a sharp decline in its Australian sales, indicating a waning link with the strong customer base it once had in the country. 

Figures show that the company has been slowing down over the last few years. According to the latest annual report, the net sales for last year were US$2 million (AU$2.7 million) lower as compared to the sales recorded two years ago. In 2012, the sales were US$11.4 million (AU$15.59 million), while in 2013 it went down to US$10.2 million (AU$13.95 million). In 2014 sales hit its lowest at US$9.3 million(AU$12.72 million)

American Apparel made an entry into the Australian market in 2008 by opening its first store on Chapel Street, Melbourne. It later opened stores in Sydney and Adelaide and stocks in a large number of other stores across Australia as well.

Speculations over the decline of the brand’s popularity and as a result, its sales, are making rounds. Fashion website ‘Lady Melbourne’ founder and editor, Phoebe Montag told the Sydney Morning Herald that the reduction in the brand’s sales volume is due to its inability to keep up with the changing needs of the people. Its offerings have furthermore been more or less static, with nothing new or different for customers even with the entry of other international brands like Muji and Uniqlo.

"They had the edge on what was probably the normcore market, with the story around it being ethically made and sweatshop-free and that it was somewhat wholesome,” added Kate Kennedy, fashion and entrepreneurship lecturer at RMIT. “But once you start to get the other things that go on, then [the] market gets cynical and turns.”

Earlier this month, Yahoo News reported that the Company had been planning to slash its spending and cut jobs in order to deal with the slumping sales. It also indicated that it might close a few stores as a result.


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