The series of six photographs shows her wearing a hoodie which unzips lower in each image, including one in which her nipple is partially exposed.
The UK's Advertising Standards Authority (ASA) ordered the ad, which appeared on the back cover of Vice magazine, to be withdrawn, following just one complaint, because the image "could be seen to sexualise a model who appears to be a child".
In response, American Apparel issued a statement saying the model is a 23-year-old adult, and that the image was "appropriate" to the publication.
It continued, "American Apparel will continue to express itself through photography, art and design as the company grows in the UK. Although it does not seek to offend anyone, it recognises that some minor discomfort may occasionally accompany [its] process of questioning various beauty norms and standards within the fashion industry."
American Apparel is not the first retail company to run into trouble of this kind through its advertising. In 1995, Calvin Klein Jeans featured pubescent models in provocative poses which famously provoked outrage for their similarity to '60s "picture set" pornography. Klein was ordered to withdraw the ads.
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