American The retailer’s overview

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Retailer Case Study and Consumer Profile

The retailer’s overview

American apparel is an integrated quality high street retailer, clothing manufacturer and distributor operating more than 273 retail stores in 20 different countries. The brand was founded in 1989 by Dov Charney, an eccentric who made a brand which accentuated his personality, style and creativeness. It wasn’t until he re-launched and relocated the company (including the manufacturing) to Los Angeles in 1997 when American Apparel took off as a success. 11,300 people are globally employed (about 5,000 in the LA headquarters and in the manufacturing), and operate more than 273 retail stores in 20 countries. The company operates the largest garment factory in the United States. (American Apparel website, 2010) The unconventional business model Dov Charney uses means that the company is vertically integrated where all facets of business are intermingled in the one location, and therefore saves money due to maximum efficiency and fast production rates, which means that despite paying $12 per hour for labour unlike using cheap foreign labour as is universal in the garment-industry practice, they still have competitive high street prices. This is one of the brands main unique attributes, with very few labels now being able to brand themselves as being ‘Made in the USA’.

American Apparel has earned its reputation by offering fashionable products of high quality at affordable prices. American Apparel is known for selling exceptionally well fitted, solid colour cotton knitwear, such as t-shirts and underwear for men, women and children. In recent years the brand has expanded, and is also well known for selling ‘dance inspired’, or for men ‘hipster vintage’ fashion garments including legwarmers, knee high socks, leggings, nylon tricot dresses and trousers, leotards and even vintage coats. As American apparels success doubled every year after 2000, they expanded to include ranges for children, dogs and home ware. They even manufacture their own nail varnish.

The retailer’s typical consumer

Retail markets can be segmented to target particular consumers. This can be anything from geographical location, psychographic and demographic. In American Apparels case, they have reviewed who their typical consumer will be. As it is not common for multiple generations in families to shop in the same retail store, they particularly targeted people who don’t have children, however at the same time, they haven’t targeted the under 18’s market. Their target audience is typically politically conscious well educated urban hipsters in their early 20’s, interested in art, fashion and photography and especially appeals to those who like 70’s and 80’s vintage clothing. These types of people are stereotyped to not own cars, not own stocks and don’t have dependants therefore although they do not have vast sums of money, they don’t have a lot of debt therefore make a perfect customer base for trendy clothing at a reasonable price, with a little extra cash to spend than in other retailers such as Topshop or Zara. The customer base could be grouped with Jack Wills or Crew as prices are similar, and are classed as preppy and fashionable however the advertisements Dov uses is well targeted towards slightly older and more sophisticated crowd.

Buyers look for a ‘uniform’ that denotes their lifestyle, or at least their ideal self. The attraction of sweatshop free clothing pulls in the niche market of politically conscious urban hipsters. The higher quality fabrics and well fitted clothing pulls in those who shop at regular high street retailers, although slightly more expensive they are happy to spend the extra to get good quality clothing. The stores have an art gallery appeal with photography by Charney himself and 70’s and 80’s pornographic pictures, appealing to an edgy crowd wanting a unique shopping experience, not those who are happy with the commercialised shops....
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