Clothier cleans up
Q&A with American Apparel CEO Paula Schneider,
A merican Apparel is gunning for a comeback. The company has a host of challenges, including those coming at it from its controversial founder and former CEO, Dov Charney.
Charney, suspended last June and fired in December for alleged misconduct and sexual harassment, and the company have been embroiled in high-profile legal battles.
And Paula Schneider, hired as CEO of the Los Angeles-based clothing company in January, has to deal with that while also trying to overhaul the brand’s image and boost revenue.
Some of her plans were outlined Tuesday during a company presentation to investors at a conference hosted by investment bank Piper Jaffray.
The retailer wants to go from “chaotic to iconic,” according to the presentation, as well as change its frequently criticized marketing efforts from “nudity and blatant sexual innuendo” to “confident and naturally beautiful.” It also wants to improve its product assortment and broaden overseas expansion.
In a little more than five months on the job, Schneider — whose background includes executive positions at swimsuit manufacturer Warnaco and BCBG Max Azria — has helped American Apparel design a new product line for fall (rolling out in July), began upgrading stores with fresh coats of paint and reorganized merchandise and even visited the White House last week to talk immigration reform.
In an interview with USA TODAY, Schneider addressed how the brand will continue to be sexy without being offensive, her plans for empowering female employees and growing American Apparel from a $600 million business in revenue into a $1 billion brand.
Q: What made you want to take this job?
A: That seems to be the question of the hour. If it wasn’t for American Apparel’s amazing brand power, I wouldn’t have taken the job. This is not a brand problem, it’s an execution problem.
Q: Several female employees have alleged sexual harassment by former CEO Dov Charney, and the company has gained notoriety for its sexually explicit advertising. What kind of environment do you want to foster for female employees and customers?
A: First and foremost, 55% of the workforce is female. And there’s significant leadership positions (here filled by) women.
There’s a lot of things that I really liked about the original advertising. I like the fact that it uses real women. I like the fact that they’re not airbrushed. I think that’s empowering. There was a certain percentage of it that went over the line. ... It is a sexy brand, and we will continue to be sexy. But it doesn’t have to be abrasive.
Q: One of the challenges you outlined in the presentation is a surplus of product. How are you addressing that?
A: There were 4,000 styles in the store, and I would say 1,000 of them did over 90% of the revenue. We cut down the styles. We probably have about 150 new designs between men’s and women’s for fall.
Q: How do you plan to stay relevant as Millennials grow up? When I think of American Apparel, I think of Halloween costumes and sorority parties.
A: That’s our biggest month of the year. ... We want to keep that business going. But a Halloween does not a business make. We have the total body con covered. We have the 16-year-old totally covered. The classic girl, 25-35, she’s grown up with American Apparel, but she hasn’t been in there in a while because it doesn’t offer her stuff she can feel more comfortable in — what we were missing is that phase.
Q: What’s the timeline for the turnaround strategy?
A: It took five years to get here. I joke that if you gained 500 pounds you’re not going to lose it in three months. ... The asset of what was built here is unbelievable; I have tremendous respect for the founder for doing that.
Internally, I would hear people say that this is a manufacturing company that has retail stores, and ... that’s absolutely the wrong thought process. This is a retail, wholesale, e-commerce company that has in-house manufacturing that’s a strategic advantage because we can be the fastest people out there.
“This is not a brand problem, it’s an execution problem.”
American Apparel CEO Paula Schneider