American Apparel Is Going Bankrupt, So Now What?

By now, you’ve probably heard the news: American Apparel is filing for bankruptcy. But, as millennials of the me-generation, we’re all thinking of how exactly this will affect us. 

And immediately, it doesn’t look like it’ll affect us very much at all.

Filing for Chapter 11 bankruptcy, as American Apparel has, affects shareholders more than customers. Instead of a closing down, it’s a reorganization. Retail stores will continue to stay open. The only difference is that instead of shareholders — like ousted CEO Dov Charney — being in charge, creditors will take over. They’re the same creditors that are leading RadioShack, which went bankrupt in February.

The filing comes as no surprise. The company has been flirting with bankruptcy since around 2011 and has recently been making some weird business decisions, including not prioritizing their online store, which is obviously a bad move when trying to cater to teens who can’t keep their eyes off their phones. As ex-CEO Dov Charney cost the company some cred with his sexual harassment lawsuits and tendency to use young, barely clothed women in ads, AA’s brand has definitely been spiraling downwards for quite a few years now. There seemed to be hope when new CEO Paula Schneider was brought on board, but in August a video was released showing workers beating a piñata bearing her likeness, claiming that Schneider recklessly handled the company’s finances.

Is this the beginning of the end for American Apparel? Maybe. The company can still turn around, but bankruptcy is obviously not a good sign.

Ironically, despite the lowkey, and sometimes very public, sexual harassment and pretty gross barely-legal aesthetic the company seems to employ, it was one of the only places to get somewhat ethically made, fashionable clothing. The brands that challenged — and maybe defeated — American Apparel, like Forever 21, H&M, and Zara, have all been accused of using sweatshops and unfair wages to keep their prices low.

And while it’s nice to not have to compromise our feminist morals by getting sweaters from a company known for questionable and sexist procedures, the question that hangs over us now is where can we buy anything that wasn’t made in a sweatshop?

Photo via American Apparel

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