"American In Peril" Outfitters

In the last few years, super-simple LA-based American Apparel has ingrained itself in hipster culture on both coasts while simultaneously expanding to become the USA’s largest clothing manufacturer, with hundreds of retail locations all over the world. The philosophy behind its fashion falls somewhere between comfy minimalism and 1980s thrift-store retro. But, given its prices, its clientele, and a recession, the question arises—will there be a place for t-shirts and spandex that simply cost too much?

In the late 1990s, Dov Charney—hailed before as the Larry Flynt of fashion—developed his idea of American-made clothing and eventually began operations in a Los Angeles factory in 2000. Despite relying on sex in his advertising and personally racking up sexual assault charges from both models and employees, Charney turned his business into a successful retailer and wholesaler that provided styles for all ages and sizes.

Apart from making comfortable and colorful clothes, American Apparel distinguishes itself as a “non-sweatshop” producer, pays its employees an average wage of $12 an hour, and is actively campaigning for immigration reform. In 2007, it posted sales of around $387 million, and it has opened 33 new retail locations in the third quarter of this year alone.

Charney’s successful—albeit possibly sleazy—altruism has not come without its prices, though. For example, basic t-shirts, which come in any number of colors, materials, and neck shapes, are sold for an average of $20. Plain socks run around $10, and unisex jeans (that only anorexic 12-year-olds can wear) are upwards of $70.

Despite its higher prices, American Apparel’s concept has worked. The brand has become increasingly popular and mainstream, and some of its original hipster fans are loathe to hear its now-ubiquitous name.

With the U.S. economy tanking and a worldwide recession pending, it’s debatable as to whether or not Am Ap can maintain its position and push on with business as usual. The reason for this lies within one of the company’s original concepts: to shift away from industry standard, overseas sweatshop labor.

In the late 90s and early oughts—a.k.a. when things were absurdly good on Wall Street—the idea of using expensive labor to make traditionally cheap goods was possible because a large number of people were willing to pay over the “Made in China” price for the sake of a moral gimmick. Now that prices are rising across the board, particularly for necessities like gas and food, people are far more likely to drop morals in favor of cheaper, foreign-produced products.

It’s fairly reasonable to expect that American Apparel’s retail business will be affected, as will its wholesale operation: small t-shirt design companies like Boston’s Johnny Cupcakes and merchandisers for music groups will likely be forced to shift priorities in an effort to cut costs. Hipsters and middle-aged, middle-class pseudo-hipsters may have to settle for generic brands in order to affordably complete their outfits.

At the same time, though, history shows us that we shouldn’t be too quick to write off such a successful brand. In the 30s, during the Great Depression, there was a shift in consumer culture away from products that were seen as foreign or imported toward more homemade goods. A combination of growing isolationism as a foreign policy tool and the encouragement to “buy American” led to more jobs created for Americans, slightly better prices, and a strengthened American manufacturing industry.

Though it’s debatable as to whether or not the United States’ current economic dilemma is as dire as it was in the 30s, it is conceivable that American Apparel can maintain some of its sales thanks to its homegrown quality. However, bearing in mind its stance on controversial immigration reform, American Apparel—along with Dov Charney—would be naïve to expect that more fervently nationalistic Americans, usually on the right, would be open-minded toward American Ap-politics.

At this point, it is up to American Apparel to decide what it is, or the market will inevitably decide for it. Where it sits now, it is neither luxury nor low-end, and unless our financial crisis rapidly resolves itself, Am Ap will have to start leaning toward extremes in order to sustain the success to which it has grown accustomed.

If it curbs its retail expansion and fully embraces high-end, it will lose a large portion of its consumer base but will gain larger support of wealthy individuals, who will still maintain their spending power despite the recession. If Charney decides to take his business the other way, he can expand his production operations, which will offer more jobs in an inflated jobless market, cut prices for the consumer, and carve out a larger portion of the domestic clothing market.

But until it decides between the extremes, American Apparel may be fated to be a passing fashion fad that simply costs too much to justify its purchase over thrift store duds and sealed, Fruit of the Loom three-packs.

A friend of mine once explained to me that American Apparel has a “don’t ask” policy for shoplifting and doesn’t use anti-theft clips. Because of this, it’s a right of passage for hipsters to steal their clothing from Am Ap. I’m not trying to suggest anything, but I’ll simply say, enjoy the recession however you see fit.

—Columnist Andrew F. Nunnelly can be reached at nunnelly@fas.harvard.edu.