American Apparel - Case Study Analysis

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Accounting for Decision Making American Apparel: Drowning in Debt? Case Study Analysis Prepared by Group 7-section A: Ambika Ravi Shankar - 14009 Ashish Sopori -14018 Ashvita Ganesh - 14020 Tamilarasi Rajappa – 14066 Pragadeeshwaran Selvaraju - 14075 Introduction American Apparel, is an American multi-national clothing manufacturer, distributor and retailer since 1988based in Los Angeles, California. Dov Charney, a Canadian business man was a founder and former CEO of the company. He was involved in nearly every part of the business process from design and manufacturing to marketing. The Ernst & Young named Charney Entrepreneur of the Year in 2004. He was also termed "Man of the Year" by various fashion…show more content…
2) In 1997, it started expanding & establishing manufacturing units in South Carolina and Los Angeles, and as of today the apparel manufacturing operations have spread to 800,000 sq. ft. of facilities in the warehouse district of downtown LA. 3) Its controversial CEO, Dov Charney had been able to sustain the business, with continued borrowing at an exorbitant rate (up to 18%) and additional capital. 4) During 2009, a federal investigation turned up irregularities in the identity documents of immigrant workers from when they were hired. 2000 workers were terminated, leading to an inability to fulfill the demand. 5) As of Feb 28, 2014, the company had approx. 10,000 employees & 246 retail stores in 20 countries. The company has business in the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea, and China. The company also operates an e-commerce website with 12 different localized online stores across the world. 6) In the apparel industry, the American Apparel’ faces stiff competition from the Gap, Urban Outfitters, American eagle, and Express. Financial facts about the company 1) In the year 2008, the sales increased

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