American Apparel: Drowning In Debt? Case Study Analysis

3383 words - 14 pages

Accounting for Decision Making
American Apparel: Drowning in Debt? Case Study Analysis
Prepared by Group 7-section A: Ambika Ravi Shankar - 14009
Ashish Sopori -14018 Ashvita Ganesh - 14020
Tamilarasi Rajappa - 14066 Pragadeeshwaran Selvaraju - 14075
IMT Dubai

American Apparel, is an American multi-national clothing manufacturer, distributor and retailer since 1988based in Los Angeles, California. Dov Charney, a Canadian business man was a founder and former CEO of the company. He was involved in nearly every part of the business process from design and manufacturing to marketing. The Ernst & Young named Charney Entrepreneur of the Year in 2004. He was also termed "Man of the Year" by various fashion magazines. American Apparel is about vision, passion, intensity, brand-free, sustainable, fair wages, solar power, recycling, creativity and the can-do spirit", according to CEODov Charney. American Apparel is known for their creative campaigns, print advertisements and own designs. The company promotes provocative and controversial advertising campaigns, which is largely the inspiration of the former company CEO, Dov Charney. The company was ranked 308th in the Inc. 2005 list of the 500 fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over US$211 Million.
General facts on the global clothing industry
The world clothing and textile industry (clothing, textiles, footwear and luxury goods) reached almost $2,560 trillion in 2010. The world market for textiles made from organically grown cotton was worth over $5 billion in 2010. In 2010, American households spent, on average, $1,700 on apparel, footwear, and related products and services.
Apparel and textile are among of the worlds' largest industries Total Global apparel exports are worth approximately USD 412 billion (2011) and global textile exports USD 294 billion.

General facts about the company
1) American Apparel (NYSE: APP) is focused on growing by enhancing the number of stores, building good online sales platform, bringing new merchandise for the users and creating strong Information Systems to support Operations.
2) In 1997, it started expanding & establishing manufacturing units in South Carolina and Los Angeles, and as of today the apparel manufacturing operations have spread to 800,000 sq. ft. of facilities in the warehouse district of downtown LA.
3) Its controversial CEO, Dov Charney had been able to sustain the business, with
continued borrowing at an exorbitant rate (up to 18%) and additional capital.
4) During 2009, a federal investigation turned up irregularities in the identity documents of immigrant workers from when they were hired. 2000 workers were terminated, leading to an inability to fulfill the demand.
5) As of Feb 28, 2014, the company had approx. 10,000 employees & 246 retail
stores in 20 countries. The company has business in the United States, Canada, Mexico, Brazil, United Kingdom,...

Find Another Essay On American Apparel: Drowning in Debt? Case Study Analysis

Case Study Analysis

998 words - 4 pages Case Study AnalysisIntroductionThis is a case study analysis of Carl Robins, a new campus recruiter for ABC, Inc. Carl has enlisted and hired 15 new employees who are to be trained and work for Monica Carrolls, who is the Operations Supervisor. Carl has failed however to make the necessary arrangements for the new trainee orientation that is scheduled to take place on June 15. He also has neglected to follow-up with each of the new trainees

Xerox Case Study Analysis

1023 words - 4 pages Xerox Case Study Analysis Xerox's "Book In Time" is a revolutionary product, presenting some new opportunities for the company. It is simply a matter of costs. The Book-in-Time equipment allows for a publishing company to produce a 300-page book for $6.90, something which could have been previously reached only for lots larger than 1,000 copies. A significant decrease in publishing costs, given the fact that these cover up to 20

Case Study Analysis

2396 words - 10 pages For this paper I will be talking about the analysis of personal and organizational ethics and values between the For-Profit and Not-for-Profit Organizations. The two organizations that I’ve chosen are Acer and Habitat for Humanity. I chose the two organizations off a whim, sometime ago I’ve either read something about them or overheard about them in a conversation. Throughout this class I found myself enjoying doing research on these

IBM Case Study Analysis

2313 words - 9 pages becoming a leader in the business of microchip technology. In order to accomplish this, the team started the planning process by conducting a thorough analysis of the external environment, scanning for potential clients and competitors, as well as looking internally for highly motivated and skilled staff. King put great emphasis on finding out and understanding their clients' needs, which added to their early success. Therefore prior to the crisis

Tylenol Case Study Analysis

1174 words - 5 pages exceeded its original market share through effective communication. Johnson and Johnson also went on to win numerous awards including the "American Corporate Conscience Award" for its social responsibility and integrity. The case is still considered today as one of the best examples of how to manage and responded in a crisis.No, I do not believe the communication could have been communicated more effectively because in the end the crisis enhanced

Case Study Analysis: BlackBerry

2301 words - 9 pages confident organizations aren’t built overnight…Even successful creative initiatives…go through a series of phases before they “cross the chasm” and become part of the mainstream culture of the organization” (Kelley and Kelley, 129). Slowly changing the creative development process at BlackBerry is an important aspect of growing creativity at the individual level. As discussed in the Coolburst case analysis, changes must be gradually incorporated

Analysis of The Types of Law in a Case Study

2204 words - 9 pages notice near the entrance at Big Deal ltd will be void and thus will have not legal affect. The same applies to Slump Ltd and they will have the ability to claim compensation plus damages.From the analysis of both scenarios in the question, it can be ascertained that there are remedies for both injured parties against Big Deal Ltd.For Slump Ltd, the exclusion clause is not relevant to their case as it does not satisfy the conditions needed to be

American Operators Inc. Case analysis

1483 words - 6 pages competitors. Staffing The most important asset for American Operators inc. is, and always has been, our employees. The many high skilled production workers are essential to the success of the company and they cannot be easily replaced in case they quit or are temporarily laid off. In connection with this, two problems stand out. American Operators inc. is heavily "leveraged" toward capital and cannot sustain losses for any longer periods

Elba Holdings Case Study Analysis

6987 words - 28 pages ; however, it has reduced by a small percentage, showing a slight improvement. But facing further economic crisis, these figures may reach a dangerous level.*Total debt to total equityThe benchmark of an industry is supposed to be 30% and lower, but in the case of Elba, it is close to the benchmark rate of the highest being 34%. These figures tells us that sales are sufficient to cover the debt, if however sales aren't sufficient to cover the debt

Effective Communication Case Study Analysis

1123 words - 4 pages response and genuine concern of the public, Johnson and Johnson set a standard for crisis management while handling this situation. The purpose of this paper is to present a case study analysis on Tylenol's crisis management plan and analyze how effective they were with communicating to their publics.Internal and External PublicsNews media, customers, retailers, police, and the FDA were the main external publics involved in the Tylenol crisis

Analysis of Tumi’s Case Study

1099 words - 4 pages . We analysis Tumi’s case study through the two elected perspectives and discuss on what evidence in the case study will support that specific perspective. We will also discuss which of the two perspectives has more evidence and which is based on fact rather than belief. The biological perspective was founded by James Old, in 1958. The biological perspective studies the chemical and the biological process of the central nervous system. The

Similar Essays

Case Study: Debt Policy At Ust Inc

1641 words - 7 pages on the interest coverage ratio under each of the different pro-forma scenarios. The interest coverage ratio illustrates the ability of the company (in this case, UST) to make interest payments on the outstanding debt. As the interest coverage ratio approaches 1, the ability of the company to make these interest payments becomes problematic. From a bondholder's perspective, the bondholder wants to be sure that the company is always able to make the

Case Study Analysis Of Guest Speaker: Mainstream American, And Chinese

1416 words - 6 pages culture have greater levels in conflict between the differences of culture. There is many aspect that can be examined between mainstream American and Chinese culture, A major struggle for Ya Li and Leo is their development of academic and social English. Unlike in America, China starts having students study a second language around first grade. This cultural skill should be one that is put in place within American schools on the grounds that if a

Mc Kinsey Case Study Analysis

2766 words - 12 pages McKinsey Case Study Analysis PAGE 1 McKinsey Case Study AnalysisMcKinsey and Co. Case Study AnalysisThis paper applies the management by objective (MBO) philosophy of Peter Drucker to the case study analysis of McKinsey and Company (McKinsey). Founded in 1926 by James "Mac" McKinsey, a University of Chicago professor, the firm started as an accounting and engineering consultancy agency, which experienced rapid growth. This paper is a plan that

Case Study Analysis

1156 words - 5 pages Case Study Analysis: The patient,MMMM, needs a blood transfusion and possibly surgery to save her life as well as the life of her unborn child related to an injury she sustained from a motor vehicle accident. The patient does not want to receive blood products or surgery. The patient's reluctance is related to her faith, which is based upon biblical scripture pertaining to blood. The primary ethical issue in this case is the patient's right to