This website uses cookies to ensure you have the best experience. Learn more

American Apparel Case Study Analysis

2236 words - 9 pages

Accounting for Decision Making
American Apparel: Drowning in Debt?
Case Study Analysis

Prepared by Group 7-section A:
Ambika Ravi Shankar - 14009
Ashish Sopori -14018
Ashvita Ganesh - 14020
Tamilarasi Rajappa – 14066
Pragadeeshwaran Selvaraju - 14075

Introduction

American Apparel, is an American multi-national clothing manufacturer, distributor and retailer since 1988based in Los Angeles, California. Dov Charney, a Canadian business man was a founder and former CEO of the company. He was involved in nearly every part of the business process from design and manufacturing to marketing. The Ernst & Young named Charney Entrepreneur of the Year in 2004. He was also ...view middle of the document...

General facts about the company
1) American Apparel (NYSE: APP) is focused on growing by enhancing the number of stores, building good online sales platform, bringing new merchandise for the users and creating strong Information Systems to support Operations.

2) In 1997, it started expanding & establishing manufacturing units in South Carolina and Los Angeles, and as of today the apparel manufacturing operations have spread to 800,000 sq. ft. of facilities in the warehouse district of downtown LA.

3) Its controversial CEO, Dov Charney had been able to sustain the business, with continued borrowing at an exorbitant rate (up to 18%) and additional capital.

4) During 2009, a federal investigation turned up irregularities in the identity documents of immigrant workers from when they were hired. 2000 workers were terminated, leading to an inability to fulfill the demand.

5) As of Feb 28, 2014, the company had approx. 10,000 employees & 246 retail stores in 20 countries. The company has business in the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea, and China. The company also operates an e-commerce website with 12 different localized online stores across the world.

6) In the apparel industry, the American Apparel’ faces stiff competition from the Gap, Urban Outfitters, American eagle, and Express.

Financial facts about the company
1) In the year 2008, the sales increased by whooping 40 percent as compared to 2007.

2) The operating profit decreased from $ 36 million to $3 million, a massive decrease of 92% in year 2009 and the net profit drastically fell from $14 million in 2008 to $1 million in 2009, a humongous downfall of 93%

For the first, time the company’s sales declined from $558 million to $532 million, a downfall of 5% in the year 2009. The operating income also fell from $24 million to a negative $50 million which was a significant drop in the profitability by exorbitant 300%.

3) Shattered by the losses and lack of liquidity, the money situation worsened by the first quarter of 2011, and the company stated that it might file a protection against bankruptcy under section 11.

4) The net loss restrained to $39 million in 2011 as compared to $87 million in 2010.

5) In year 2012, the company undertook efforts to upgrade the production forecasting and allocation system, which led to total net loss decreasing from $39 million to $37 million in the year 2012. The sales also started building up. The net sales of the company increased from $547 million to $617 million in 2012.

6) The company implemented two important strategic initiatives in the area of inventory management and the new distribution center in 2013. It also completed its RFID system and implementation of oracle, ATG web commerce application, for its e-commerce platform leading to significant increase of...

Other assignments on American Apparel - Case Study Analysis

Finance Essay

3553 words - 15 pages in the result analysis part where we have used table and described all things consecutively. After having all discussion we have tried to find out the some positive or negative things of our study. When we have completed our findings and analysis we tried to draw some recommendation about the findings of our assignment. Finally we have tried to make conclusion of our assignment. 4. Scope & Limitation of the Study

The Gap Essay

918 words - 4 pages   Case 11 Gap, Inc. Jeri Schuster Dickinson State University History Gap Inc. is a retailer located at America at San Francisco that deals with clothing and accessories. It was founded in year 1969. It is one of the world largest giant's dealers in the apparel retailers. It has more than 3000 stores and branches in the United States, Canada, Britain France, Ireland and Japan. In 2009, it registered fiscal revenue of 14.2 billion

Research Methodology

482 words - 2 pages the actual impulse purchase behavior of apparel buyers; multiple regression analysis has been conducted for the same. Then the demographic difference in the actual purchase behavior of apparel buyers has been studied with the help of ANOVA. Sampling Design People carrying shopping bags in the malls of Jaipur city, Rajasthan will be considered as sample for this study. Mall intercept method will be used for this purpose. Sample size has been

Management

837 words - 4 pages Governance * Organizational Design * Strategic and Operational Planning MANAGEMENT OF INFORMATION TECHNOLOGY FOR COMPETITIVE ADVANTAGE: A SAVVY CASE STUDY * The value of information technology * strategy and innovation How can hospitality organizations create IT induced * IT Usage Stages and IT-Induced Competitive Advantage * Technology Sophistication * Management Skills * Resource Integration INFLUENCE OF

Pricing

6384 words - 26 pages have little or no impact on their purchase decisions. A McKinsey & Co. study shows that LPAs can range widely: from 17% for branded consumer health and beauty products to 10% for engineered industrial components and apparel to only 2% for some financial products.4 LPA can be discovered through three approaches. The first is to observe the range of prices for a particular product that customers find in different channels. For instance, a Sony

Vans Analysis

437 words - 2 pages Vans Flow: 1. Background information 2. Client analysis (SWOT analysis) 3. Comparison with its competitors (Perceptual map)+ suggestions 4. Customer analysis (Market segmentation)+ suggestions Background information: (30s) • An American brand since 1966 • Apparel industry • Starting to sell classic skateboarding shoes when the huge skateboarding era (1970s) hit the States • It is considered as the largest extreme

How To Write A Case Study

470 words - 2 pages Here's How: 1. Investigate and Analyze the Company’s History and Growth. A company’s past can greatly affect the present and future state of the organization. To begin your case study analysis, investigate the company’s founding, critical incidents, structure, and growth. 2. Identify Strengths and Weaknesses Within the Company. Using the information you gathered in step one, continue your case study analysis by examining and making a

Case Studies

657 words - 3 pages problem evident in this case study. These CEOs are very ignorant. They attend the corporate public relation congress in Washington unprepared and thus appear to know nothing about their problems. The three companies, GM, Ford and Chrysler, lack the concepts of public relations. The main issues American economy is melting down. Most of the workers are losing their jobs since the companies cannot handle many workers anymore. The companies have

Assessing A Firm's Future Financial Health

331 words - 2 pages Case Study Assessing A Company's Future Financial Health The list of companies matched with their corresponding balance sheets and financial ratios are as follows : - A – Electric Utility B – Discount General Merchandise Retailer C – Japanese Automobile Manufacturer D - Automated test equipment/systems company E - Upscale apparel retailer It can be observed from exhibit 3 that the fixed assets(The property and equipment cost

Sara Case Analysis

981 words - 4 pages Lee could benefit from concentrating its financial and managerial resources on a smaller number of business segments where market prospects were promising and Sara Lee’s brands were well positioned. As the first phase of Barnes’s transformation plan, Sara Lee was to exit eight businesses: Direct selling, U.S. retail coffee, European apparel, European nuts and snacks, European rice, U.S. meat snacks, European meats, and Sara Lee branded apparel.The

Zara Operations Strategy

4086 words - 17 pages textile industry, competition is numerous and suppliers’ power thus marginal. • Raw materials are bought in so called “low-cost-countries” • Overall the bargaining power of Zara’s suppliers is very low. * Counterfeit goods The abundance of counterfeit goods and accessories is adversely affecting the sales of branded products (Datamonitor 2008). • Its inability to penetrate the US apparel market This may be due to American

Similar Documents

Ford Case Study Analysis

534 words - 3 pages . Is Ford a market-centered company? How can it improve in this area? Considering the fact that Ford currently pays attention to both customers and competitors in designing the company’s marketing strategies, I would say they are definitely a market-centered company. This may not have always been the case, as is evident from reading the case study. At some point, Ford took its eye off the market, loosing focus, especially in regards to customer

Costco Case Study And Strategic Analysis

3114 words - 13 pages Costco case study and strategic analysis Costco Wholesale Corporation (Costco), one among the few largest wholesaler giant differentiates itself applying unique strategies relating to production and operations, and marketing which make it stand out from the rest of the retailers who are also said to be competitive in the retailing and wholesaling business globally. Costco is one of the innovative wholesalers teamed by very dynamic management

Mdi Branded Apparel Store Essay

3546 words - 15 pages Asian/Pacific-American Gay & Lesbian Latin Women Education policy The Coca-Cola Company is committed to helping people make their dreams come true. All over the world they are involved in innovative programs that give hardworking employees interested in studying books, supplies, places to study and scholarships. Time management policy They are managing the working time in two shifts. They can include some

The Advantages And Disadvantages Of China’s Apparel Manufacturing Industry

905 words - 4 pages manufacturing. New England slyly acquired Britain’s patented technology and spearheaded apparel manufacturing. Later, the South dominated manufacturing because of slavery and sharecroppers. However, Southern farmers exported to Japan, who had cheaper labor. Soon, China, Taiwan, and Korea surpassed Japan. “Today, China is not only the largest buyer of American cotton, it is also projected to soon produce more than forty percent of the world’s cotton