New American Apparel CEO puts focus on order, discipline

When Paula Schneider took the helm of American Apparel just two months ago, she described what she walked into as "frenzied."

On Dec. 16, American Apparel officially terminated founder Dov Charney from his position as CEO and named Paula Schneider to fill the role. Charney was initially removed from the job in June for misconduct.

The fast-fashion chain has been suffering tough times with declining sales under Charney's leadership, which ended with the founder being fired for accusations of sexual harassment and personal misconduct.

Schneider has described the state of the company as needing more discipline and more structure. With just one person in the business planning department, she added four planners to oversee the design, knitting, dyeing, cutting and sewing of the clothing. And she still plans to add more.

Apparel Apparel won't back away from being an edgy brand, but Schneider wants to shift the marketing strategy to one that touches on social issues such as using 15-year old Brendan Jordan, a teenager who recently danced his way into virtual video stardom and is now speaking out for gay issues.

American Apparel has not turned a profit since 2009, and the company is expected to lose some $55 million this year. In addition, Charney has not gone away completely—he still owns 43 percent of the company's shares. Last summer Charney teamed up with Standard General to amass a large stake in the company, but the hedge fund decided to replace all of American Apparel's board in return for around $25 million in aid.

In fact, the retailer has been delaying payments to its suppliers by as many as 60 days. The company is trying to avoid a cash crunch following a less-than-stellar holiday season.

Therefore, the company is considering a $245 million offer from the John D. Howard firm.

Schneider says that with great organization the company can easily compete with other fast-fashion retailers, who have taken their manufacturing facilities overseas. American Apparel has the advantage of making everything in Los Angeles.

In addition, Schneider wants to significantly raise online revenues from where they stand at about 15 percent.

Finally, the company will have to make expansion decisions. It runs a select number of stores outside of the United States but will have to consider opening more or focusing on closing stores that are underperforming at home, as well as opening in underserved markets.

For more:
-See this New York Times article

Related stories:
American Apparel delaying supplier payments
American Apparel CEO likely fired over sexual harassment
American Apparel firing CEO over misconduct
American Apparel seeks restructuring advice as it struggles with massive debt
American Apparel CEO: We pay workers $2,000 per month, and H&M can't pay $50?

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