American Apparel's strange mix

For those who haven't heard of it (like me, until this morning), American Apparel is a textile company headquartered in Los Angeles. However, unlike many companies selling attire in this country, 100% of their wares (or is that wears) are made in the US--in fact, at their headquarters/factory in downtown L.A. Salon has an article (ad or subscription required) that gives specifics on the company's odd blend of worker-friendly and industry-hostile politics and business.

From their website, most of the garments sold by [aa] are what would be considered classic. They sell a multitude of T-Shirts, women's undergarments, and a few styles of jackets. With the exception of the fashions for dogs, the mix is a pretty basic.

Where things start to get interesting is when you look at their employment and business practices. To start with, the company is vertically integrated. That means that they take in thread in Los Angeles and sell the end product to customers over the net, in L.A., New York, and Montreal. During that time, nobody but employees of the company touch the garments. There is no off-shore production, no outsourcing, and no factory in China. Here in the states, their workforce (mostly Latino) is paid a "living wage" (they claim an average of $11/hr), receive health care, and have a strong corporate community.

Heck, some of the ideas--such as company pizza parties--sound more at home in a high tech firm than a firm whose stock-in-trade is fabric.

Of course, this kind of radical thinking has people up in arms, but not the business community and not the employees. No, the problem appears to be the labor unions (who have unsuccessfully tried 3 times now to unionize the workers) and the fashion industry (who don't like the company's idea of making each product line for 100 months).

It remains to be seen if this line of thinking can work in the long term, but according to Salon, the company doubled its gross from 2002 to 2003, ending the year with $80M in sales... not too shabby.