American Apparel CEO Dov Charney earned some rare good press when his 2011 Q3 earnings showed revenues finally rising at the troubled retailer of thong leotards and spangly leggings. Sales rose 5 per cent to $141 million after years of declines. But don’t get the idea that somehow AA is becoming trendy again (or even sexy, as its advertising suggests). It’s not.
The company is clawing its way back from the brink of bankruptcy largely thanks to its ultra-boring wholesale and internet business, which no one except Charney’s many creditors care about.
Here’s how the numbers break down, per AA’s quarterly 10-Q filing with the SEC:
- Total sales: up 5% to $141 million
- U.S. Wholesale: up 9% to $36.7 million
- Total internet sales: up 13% to $13 million
- U.S. Retail sales: down 1.4% to 43.1 million
The good news is that there are parts of the company that are growing. The bad news is that the total sales increase disguises the fact that, overall, fewer dollars are being spent in Charney’s main street stores here in America.
The online and wholesale businesses serve mundane customers such as people who want to buy basic T-shirts and sweaters online, and folks making custom shirts on Zazzle and Cafe Press. The company rarely talks about them, perhaps because Charney regards himself as a fashion rock star and not as a successor to Fruit of the Loom.
It’s not sexy, but it’s money.
Don’t miss: 10 reasons why Dov Charney is a brilliant businessman >
Correction: This item was originally illustrated with a different ad that the company says it did not make. The company says the ad was created by someone hoping to be hired by the company.
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