American Apparel has been quietly plotting a network of both wholesale and retail sales in Australia with very little fuss. Nina Lees looks at how the label has grown from a niche brand jostling for elbow room to achieving cult status in a few short years.
American Apparel is making some serious waves in the Australian rag trade, which comes as no surprise to its legions of fans.
The iconic brand specialises in moderately priced, good quality basics, with plain cotton T-shirts fronting a growing range that now also features skinny jeans, leggings, cotton sundresses, bags and more for men, women and children; attracting a growing number of fashion-forward metro-types. And this winter the company is branching out even further, manufacturing its own range of basic pea coats, knitted pieces and Oxford shirts.
All up, things look promising for the Australian operation. It's being buoyed by strong wholesale support and a growing number of Australian brand devotees, which prompted the brand to bite the bullet and put wholesale growth on hold in favour of establishing flagship retail stores, with the first store opening in Melbourne in March, 2008.
With stores now open in the centre of Melbourne, Sydney and Adelaide and a wholesale network stretching far and wide across Australia, this Los Angeles-headquartered brand is starting to turn some pretty high powered heads, with competing basics brands already established in Australia no doubt starting to sit up and take notice.
Possibly part of the brand's success has been its cautious and carefully planned rise to fame. American Apparel warily dipped its toe in the Australian market by booking a tiny stand at trade fair Fashion Exposed a few years ago, hoping to ascertain what sort of interest there was in the local market for the cult status all-American brand.
The company was also cautious about venturing into retail here, favouring a 'soft launch', unlocking its very the front door on the shiny new Chapel Street store at 4pm on a Saturday in March last year, with no promotion or fanfare, waiting with one proverbial eye open to see what the reaction would be. The store manager was shocked to find a crowd of 30 or so shoppers who had heard about the launch waiting outside the door, all eager to get inside and touch and feel the new range.
William Snell, retail co-ordinator for Australia, explains that online sales from Australian brand devotees have been steadily growing, prompting its expansion into the local market. "We had two different sorts of customers - those who didn't knew American Apparel well and were keen to get to know us, and those who had been buying our range online for years, and knew our products really well. When we opened here, consumers really sat up and took notice. We stand for clean, simple, well-manufactured products. It's about simple classics," Snell says.
"A lot of Australians who have been overseas and seen our plain T-shirts in the US had fallen in love with the brand and now we're here, they're responding by spreading the word to family and friends in Australia," he says.
Snell has been responsible for finding the best location for the stores down under, deciding on Chapel Street in Melbourne (opened in March last year), Oxford Street in Sydney (opened in July last year) and Rundle Street in Adelaide (opened in December last year). Additional stores are also on the cards when the right locations become available, according to Snell, who says he's optimistic but cautious about more growth. Meanwhile, online sales continue to grow steadily.
The bricks and mortar stores aren't your average shop, with 300sq/m of retail space adding to the brand's larger than life persona. "We're after high foot traffic locations but we don't want to be smack bang in the centre of town," Snell says.
But he was far more coy about the brand's turnover in Australia, only admitting that sales were higher than had been forecast.
"Our stores still have a new store sheen to them - we haven't even been open for a year. But I can say that sales have certainly exceeded our expectations."
But there's a story in the local rag trade that sales at the Sydney store on the first day it opened outstripped first day takings for American Apparel-branded stores anywhere in the world.
Snell says: "We make sure our stores are in great locations. And we seem to do well in these tough economic times even though others are struggling. We're constantly finding there's demand out there for basic pieces."
So what is it about this brand that stands out from the cluttered fashion market, exactly? Well, unlike so many T-shirt and basics brands, American Apparel steers away from self-gratuitous promotion, with no distinguishing logos anywhere to be seen, which punters seem to like. It offers high quality basics at low prices, with the average T-shirt retailing for $27 and almost everything in the store retailing for less than $100.
American Apparel's founder, creative director and controversial chief executive, Dov Charney, has proven he's a leader, not a follower, making a conscious decision not to manufacture his apparel in Mexico or China to save costs - like so many other fashion brands have done.
Instead, he established his headquarters in Los Angeles and hired Hispanic people, who relocated to LA in droves for the opportunity of a lifetime. American Apparel supports its staff in their new life in ways not seen before by manufacturers of mass-market fashion. The 5,000-plus mostly Hispanic workforce are offered full use of the on-site medical centre and given free medical care, are offered subsidised lunches, free English lessons, bus passes; and financial incentives.
When Charney wanted to increase T-shirt production he went to his staff and created teams and explained that if they could increase production while still creating the best possible garment, he would increase their wage in a move that won him great support among workers These days, American Apparel, which has more than 300 stores around the world, is producing around one million T-shirts every week.
This unique approach to retailing has proven to be the company's secret weapon and is the perfect springboard for the brand to make it big in overseas markets, with a strong production system controlled by 40-year-old Charney himself ensuing supply and demand can be met around the world.
Charney's approach to marketing his brand is also out of the box in an industry famous for using images of airbrushed perfection in advertising campaigns. He shoots the ad campaigns himself using both willing American Apparel staff and young people he scouts from the streets, with his subjects often only half-dressed, in sexual poses and with fat, stubble and other unflattering aspects played up, not down.
His approach is wise, with the ads not only striking a chord with his metro-20-something target market, but attracting attention with the wider population - and when he's lucky; the media.
Dwayne Armstrong, who was bought to Australia to help establish the wholesale side of the business, describes Charney as a visionary. "He's really gone against the norm. Australians are pretty fashion forthright and when word got out that we were setting up in Australia there was great anticipation about our arrival," Armstrong says.
Charney has also established his retail, wholesale and manufacturing operations as three separate businesses and ensures they don't compete, according to Armstrong.
"We're getting phone calls from Australian universities now who are asking us to manufacture their range of gear for students. The feedback has been phenomenal from the Australian market."
Armstrong acknowledges that the fashion industry is facing a bleak year, with sales down and staff layoffs common, but says American Apparel is managing to buck the trend; for now, at least.
"We want to make sure we're able to sustain our growth here, and ride the economy as best we can. But we believe that being known as a basic brand has meant we're a little more shielded than some other [labels]. And we're still new here, which gives us an appeal the more established brands don't have. I'm not sure how those companies selling T-shirts for $90 are going to survive; they're the ones who will be doing it tough," he says
And of course, where they are stories of success within the fashion world, stories of copycats abound. A T-shirt brand called AAA; and another one calling itself Alternative Apparel, have apparently sprung up since the success of American Apparel, with varying degrees of success. But as they say, imitation is the best form of flattery.