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American Apparel faces challenges other retailers have

Nova Safo Oct 5, 2015
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American Apparel faces challenges other retailers have

Nova Safo Oct 5, 2015
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American Apparel, which filed for bankruptcy Monday, is just the latest once-cool retailer that’s struggled to keep up with the times.

The retailer made a name for itself by making clothes in the U.S. when most other retailers were making them overseas. But the company has not made a profit since 2009.

It joins a growing list of big retail brands that are now struggling: Abercrombie & Fitch, Gap and J.Crew are among those that have either cut jobs or closed stores this year. All are contending with a quickly shifting fashion marketplace in which the latest logos are less important than the latest looks in fashion, a trend known as fast fashion. 

Stores that quickly bring in new fashion trends at cheap knockoff prices are doing well.

The H&M’s, the Zaras, the Uniqlos,” said Wendy Liebmann, CEO of WSL Strategic Retail, “fast fashion, off the runways, into the stores … six weeks later, a whole new selection.”

Retail industry analyst Paula Rosenblum of RSR Research said that older retailers are also struggling with the in-house talent necessary to get back in the in crowd. 

“What they need is someone with the creative chops to help them get cool again,” Rosenblum said. “It’s just that finding these guys is a bit like finding a unicorn.”

Even if companies find their unicorns, they are trotting on shifting ground. Retail strategist Kevin Kelley said fast fashion may be doing well for now, but there are already indications that it too has an expiration date. He said, increasingly, consumers are drifting away from fast fashion and towards connoisseurship, especially millennials who are getting older and have more disposable income. 

“Consumers are realizing that it’s better to own two really great pair of jeans than 10 pairs of really cheap jeans,” Kelley said, adding that smaller, niche retailers are winning in this environment by telling compelling brand stories “about how it was made, what processes they went through.”

“There’s a real personal vision,” he said.

Correction: A previous version of this story attributed a quote to the wrong source. The text has been corrected.

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