American Apparel, long committed to producing all of its clothing domestically, may not be able to cling to that "Made in America" label for much longer. While the company has no definite plans to move production abroad, after nine consecutive quarterly losses, the possibility looms.
"To say that I'm never going to import from overseas would be unreasonable," CEO Dov Charney told the Los Angeles Times. "At this time our business concept is to make everything here. But I wouldn't rule anything out."
Since manufacturing overseas would alleviate the company’s financial strains, Charney is facing an increasing amount of pressure from various executives to consider making the move abroad, but he and others believe that it is important to employ workers domestically and, furthermore, that producing in America is a cost-effective strategy in the long term.
As transportation costs continue to rise, Charney rationalizes, "it's going to make a lot of sense to manufacture in the United States or in Los Angeles."
Los Angeles is the current location of American Apparel’s main factory is, the largest garment-making facility in the U.S. It is also a source of employment for thousands of workers, many of whom are immigrants, who benefit from a salary higher than they would receive elsewhere and other perks such as subsidized meals and access to a medical clinic.
The role that American Apparel plays in the Los Angeles job market is therefore another factor that must be factored into the decision of whether or not to move manufacturing overseas.
Plenty of other companies in the retail industry have either always produced abroad or have already made the move in search of cheaper labor. If American Apparel is forced to do the same, at least they have made a marked effort to keep production in the U.S for as long as financially possible.
“Few other U.S. clothing manufacturers employ more than a few hundred workers,” Sarah Y. Friedman, executive director of the National Assn. for the Sewn Products Industry, told the Los Angeles Times. "American Apparel is very, very remarkable," she said. "Anytime you have a retailer with thousands of employees still in the U.S. — that is pretty remarkable."
So next time you look at that cotton tee at American Apparel and wonder why it’s pricier than other brands, remember that it was produced sweatshop-free.
Check out this list of other clothing brands made in the U.S .
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