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American Apparel aims to cut $30M in costs, layoffs

American Apparel is aiming to slice $30 million in operating expenses in the next 18 months via layoffs and store closures as the fashion clothing retailer continues on its turnaround quest.

July 7, 2015

American Apparel is aiming to slice $30 million in operating expenses in the next 18 months via layoffs and store closures as the fashion clothing retailer continues on its turnaround quest. Part of that plan is debuting a new fall line targeting what it calls "advanced basic" in men’s and women’s clothing.

"Historically, the fall season has not been a major focus for the company. We are beginning the process of re-merchandising the product assortment in our retail stores to increase productivity by SKU," Paula Schneider, recently appointed CEO, said in a company statement. "The new styles are designed to increase revenue as we continue to evolve our product offering during this important selling season," Schneider said.

Citing the competitive retail environment and “volatile” foreign exchange markets, the company will shutter underperforming locations while looking to add new stores in more profitable areas.

American Apparel also announced it was dealing with legal battles with company founder Doy Charney, who has filed nearly two dozen lawsuits against the company.

"We are committed to turning this company around. Today's announcements are necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability," said Schneider.

American Apparel also announced two recent leadership hires: Christine Olcu has been named general manager of global retail, and Brad Gebhard is now president of wholesale.