The Success of American Apparel in New Zealand

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Running Head: SUCCESS OF AMERICAN APPAREL IN NEW ZEALAND

Opportunity for American Apparel to Thrive in New Zealand
Christina Strader
Ashley Taylor
Business Communication
Spring, 2009
Prepared for Professor Tonya Riney

Table of Contents
Abstract3
Figure 13
Opportunity for American Apparel to Thrive in New Zealand4
Analysis of the Current U.S. Market4
Presence of the Young Adult Market4
Characteristics of the Millennial Generation 4
Expenditures of Under 25 Consumers4
Identifying the Urban Consumer5
American Apparel Thrives in Mid-Sized Cities5
Population of U.S. College Students5
Strategic Placement in University Towns5
Students Prefer Food Away From Home5
Percentage of Nightlife for University Town Storefronts6
Figure 26

Analysis of the Proposed New Zealand Market6
Presence of the Young Adult Market6
Characteristics of the Millennial Generation 6
Expenditures of Under 25 Consumers7
Figure 37
Identifying t Andhe Urban Consumer7
American Apparel Thrives in Mid-Sized Cities8
Population of New Zealand College Students8
Strategic Placement in University Towns for Alcohol Consumption8 Students Prefer Food Away From Home8
Percentage of Nightlife for University Town Storefronts9
Conclusions9
Recommendations9
References10

Abstract
New Zealand provides American Apparel a gateway into a growing retail market in the Pacific Rim. American Apparel targets a youth market that is prevalent and growing in the urban centers of New Zealand. American Apparel is a unique clothing retailer that targets metropolitan young adults. Universities in New Zealand are growing at a high rate, where Auckland, New Zealand’s business centers are overtaken by young adults pursuing college educations (Euromonitor International, 2009). The high percentage of young adults combined with high university enrollment will support the fashionable yet affordable American Apparel. This is highlighted by New Zealand’s strong economy, growing cities, and above-average spending in the youth market. Auckland, New Zealand, http://maps.google.com/ Retrieved via GoogleMaps Figure 1

Opportunity for American Apparel to Thrive in New Zealand

American Apparel is the largest clothing manufacturer in the United States (Vernon, 2008). It currently has 260 retail locations in 20 countries and 31 states, but has yet to expand to New Zealand’s successful economy (Teklits, 2009). American Apparel is the leading provider of cotton leisure wear geared toward the contemporary and metropolitan clientele, a large portion of New Zealand’s demographic (Hoover’s, 2009). According to Chairmen, President, and CEO, Dov Charney, American Apparel is targeting mainly “young metropolitan adults” in the United States and Internationally (2009). American Apparel’s international expansion should continue into New Zealand because of the similarities between the United States’ and New Zealand’s youth markets and thriving college consumer spending, which drive American Apparel retail success.

Analysis of the Current U.S. Market

American Apparel provides cheap clothes to “urban-dwelling early-twentysomethings” (Vernon, 2008). CEO Dov Charney says his target market represents the “world-metropolitan culture (The Economist, 2007).” These college graduates reside in urban areas with “organic coffee shops, tiny boutiques, galleries and independent bars…they’re bloggers and clubbers and denizens of art parties, a kind of new bohemian (Vernon, 2008).”

Presence of the Young Adult Market

The young adult population includes 42 million consumers between 15-24 years old (Brown, 2005). The population is divided evenly between 15-19 year olds and 20-24 year olds (2005). Young Adults are classified into the Millennial generation, born between 1977-1994 (New Strategist Publications, 2004). This generation accounts for 26 percent of the total population, numbering 73 million 10 to 27 year olds (2004).

Characteristics of the Millennial Generation...
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