Dov Charney, its founder and longtime CEO, is gone.
Private equity firms are circling for a buyout.
But influential young fashion bloggers and designers still say American Apparel is in no danger of going out of style.
"I've been shopping there for at least a decade and the products are of great quality," said writer and TV host Lauren O'Neil, who lives in Toronto. "Always on trend too, if not setting the trend. The hipsters in this city worship AA."
In an already messy year for the Los Angeles-based company that included a near-default, December has been especially tumultuous.
Last week, the company finally fired Charney after an "internal investigation." Charney had faced accusations of sexual misconduct and financial mismanagement, though has never been charged. And the New York Post reports at least two different private equity firms have proposed takeover bids, as the company's share price is now barely above $1.
But on the street (and on social media) interest in American Apparel remains healthy.
Natalie Joos, the Belgian-born, New York-based writer behind fashion blog Tales of Endearment, said the chain is still the go-to for inexpensive T-shirts. "I like that they don’t have logos and look generic and basic," she said, adding there is a major opportunity for them to capitalize on the "normcore" fashion trend. Vogue defines normcore as "a bland anti-style" that involves "dressing in an utterly conventional, nondescript way."
"They are one of my favorite brands and I hope very much that they go from strength to strength," said Christian Davies, executive creative director of design and branding group Fitch. "The good news for the new CEO is that product remains technically superior for the price (the baby-rib alone may be the best tee for the money on the market today in terms of both fit and finish)."
Hundreds of people around the world continue to post selfies on Instagram showing off American Apparel clothing — here are its all-time hashtags.
The company seems to have already realized that its greatest opportunity may lie abroad, since half its stores are outside the U.S. Joos said they could further improve their image by shrinking their physical footprint — the company now has more than 250 locations around the world, the same number as Ralph Lauren, whose revenue outnumbers American Apparel's by a factor of 10.
"We can do with less," Joos said.
Charney's ouster came within a few weeks of Mike Jeffries' departure as CEO Abercrombie & Fitch, where revenue has been plunging for the past two years. But while American Apparel's finances are more immediately dire — it continues to have a negative book value, and this summer it needed an emergency line of credit to avoid default — its brand does not face the same kind of existential threat as Abercrombie's.
"In Abercrombie’s case they are in the middle of a reinvention," Davies said. "Their problem was a slow slide into irrelevance and they are working very hard to find a new voice. In contrast, I don’t think AA needs a new voice per se but they need to find new ways to express it."
He said the company may now try to play up the fact that its clothes are locally made and sweatshop-free, but do so in a way that allows them to keep their edge.
"Or [else] it wouldn’t feel like them," he said.
Indeed, even as Charney's fate became less certain, the company ran the following ad in October showing a Bangladeshi-American employee named Maks, who "doesn’t feel the need to identify herself as an American or a Bengali and is not content to fit her life into anyone else’s conventional narrative."
Writer O'Neil said she still finds such ads "atrocious" but that they still help create buzz.
"AA always manage to generate tons of media attention, and however bad the commentary, it's raising brand awareness," she said. "Constantly."
Charney's exact fate at the company remains muddled. On Tuesday he told Bloomberg that he has less than $100,000 left in his name, despite still being its largest shareholder. But Fortune reports that he could be brought back in an advisory capacity if a private equity takeover is completed.
Davies said that as repulsive as Charney could seem, he was the soul of the company.
"Had it been me, I would have made the same move," he said of the board's decision to oust him. "But how much spirit will be left at American Apparel without its founder? Only time will tell but I think that's what people were drawn to."
Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.