What's American Apparel's secret?

The controversial clothing label is posting profits while its competitors flounder. By Danielle Radojcin

American Apparel has this month posted a profit, while competitors such as Gap are struggling, a report in Women's Wear Daily has revealed. While shops across the UK and the US are closing, it continues to expand - it now has 260 stores in 19 countries. So what's the secret of its success? According to Dov Charney, who founded the company in 1997, the first clue is "authenticity, in the way that Levi's is authentic." Second, it's a vertically integrated company, which, unlike companies such as Levi's, makes its product in Los Angeles, where the company is based. It also pays respectable factory wages and provides healthcare benefits for its workers. This appeals to today's more ethically-minded shopper, who frowns at Primark's reported dodgy dealings. Other key reasons for its success are its no-sale policy (although customers can buy at discount via its website, and there are outlet stores in LA), and also that it is a season-less brand.

The company is not without scandal, however. Charney, who is notorious for his eccentricities such as "living with young subordinates in a mansion in Los Angeles and serving as the company fit model for the underwear design process", has repeatedly been served with lawsuits accusing him of sexual misconduct, charges he denies. This seedy element is reflected in its advertising, often shot by Charney himself, showing models and employees in poses which some have said look like porn castings. The company, says Charney, "has always had at it core a very distinct aesthetic - one based in reality and accessibility that does not shy away from the things that make us human, including our flaws." Trading on moral outrage, of course, is as old as Calvin Klein's adverts, and is no doubt welcomed by trendy customers bored of Gap's butter-wouldn't-melt campaigns.

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