After a tumultuous stretch, the final nail has been driven into the retail coffin of American Apparel after Canadian T-shirt and underwear maker, Gildan Activewear Inc, paid $88 million USD to acquire the fledging brand and subsequently made the decision to shutter the remaining 110 stores throughout the country by the end of April.
At its height, American Apparel had more than 230 stores nationwide – often buoyed by its “Made in America” ethos and racy ad campaigns – making it not only a lightning rod for consumers, but also a singular location to achieve what they deemed, “in the now.”
These closures are but further proof that hype is often fleeing and that we are moving full steam ahead away from the places and brands that defined the new millennium.
Whereas once upon a time we wanted to dress like the rest of the herd, people these days are subsequently looking to establish individuality through customization of clothing or by acquiring extremely limited pieces. In turn, “mall brands,” have lost their allure.
While some brands continue to operate and actually thrive due to a number of factors, others have met a similar fate as American Apparel.
Here’s how seven of the biggest brands from the early 2000’s are faring these days.
Abercrombie & Fitch
Although it may seem unlikely, Abercrombie & Fitch actually started as a 19th century outdoor brand who spent the better part of ninety years attempting to win the admiration of people who sought to look like legendary adventurers like Ernest Hemingway and Teddy Roosevelt.
But when Limited Brands brought in Michael Jeffries in 1992, he ultimately took the apparel in a very preppy, casual direction which focused on tight pieces worn low rather than the billowing khakis ensembles that had sustained the company for a century.
Jefferies was a rather unlikely candidate to steer the direction of the company as his previous two stints at Alcott & Andrews and Paul Harris both resulted in company bankruptcies.
Regardless, Jefferies was believed to be the right man for the job thanks to his obsessive attention to detail – a trait which earned him the moniker, “the Willie Wonka of the fashion industry.”
Jefferies was the one responsible for the Abercrombie & Fitch Inc.’s notorious 29-page “Look Book,” which not only described how many buttons should or shouldn’t be undone on pieces of clothing, but whether or not employees could even wear jewelry or facial hair.
“This is very much a military operation,” Jefferies told the Wall Street Journal. “It is very disciplined and very controlled.”
Abercrombie & Fitch went public in 1996. By 2001, the number of Abercrombie stores had nearly quadrupled – resulting 125 stores, sales of $335 million USD, and profits of almost $25 million USD.
According to Bloomberg, for a decade straight, Abercrombie’s profit increased every year as it expanded to 600 stores.
At it’s height, the company was valued at $5 billion USD and had revenues approaching $2 billion USD a year from more than 800 stores.
But by 2008, Abercrombie & Fitch was hemorrhaging money after a string of lawsuits for racial discrimination and retail missteps on Fifth Avenue in New York City and on Savile Row in London which resulted in $58 million USD worth of losses.
By 2013, Abercrombie would lose 220 mall stores. Not surprisingly, Jefferies was pressured to step down from his CEO position and he ultimately acquiesced the shareholders.
As of August 2016, Abercrombie continued to operate 744 U.S. stores despite net loss increasing to $13.1 million USD from $810,000 USD and net sales falling to $783.2 million USD from $817.8 million USD.
As for the future, roughly 50 percent of the retailer’s leases are up for renewal over the next 18 months. Thus, we could finally start to see the retailer disappear from the landscape.
“I would not be surprised if half of those [locations up for renewal] end up closing,” Garrick Brown, Cushman & Wakefield’s vice president of retail research for the Americas, told CNBC.
In 1989, would-be entrepreneur and future Shark Tank panelist, Daymond John, was 20 years old and hoping to eek out a living in Queens by selling homemade T-shirts and tie-top wool beanies on the street.
FUBU was a direct response to what he thought was a slight by boot manufacturer, Timberland, who despite being popular in the hip-hop community, hadn’t been embraced by the company itself.
“So, I joined up with a couple of my friends and we [started our company],” John said. “We said we really want to be inclusive and really proud of the people who we’re selling these clothes to. So we came up with a name: FUBU ‘For Us By Us.’ It was all about a culture, not about a color.”
FUBU wasn’t an instaneous hit, but after constantly selling out small orders through deals on the street and at trade shows, John knew he had to jump in with both feet.
With additional help from childhood friends, J. Alexander Martin, Carl Brown and Keith Perrin, the quartet ramped up production.
“After a couple years of seeing FUBU as a hobby, I decided to get serious and stick to a standard daily schedule,” John recalled. “I would wake up at about 7 or 8 in the morning, and I would sew the hats by myself, tag them, answer a couple of orders that came in overnight. Then I’d take the hats, package them, and begin to ship them out. I took care of all of that until about Noon or 1 PM. Then I’d hit up Red Lobster around 4, work there until midnight, come back home, make more hats, and tally up any orders until about 1 or 2 in the morning. I’d start the routine all over again the next day. I did this for about two years straight.”
His partners ultimately moved in to a house John shared with his mother which served as a self-run sweatshop of sorts.
“It was a typical Queens house, the kind you see on All in the Family.” John remembered. “It had three levels: A basement, the first level with a dining room, living room and the kitchen, and then three bedrooms upstairs. After we took out the mortgage, we took all of the furniture out of the house, sold what we could, and the rest we burned in the backyard. We put all the raw materials down in the basement, and on the first floor, we converted the living room and put eight sewing machines there and we hired some seamstresses. In the dining room, we put a cutting table where we cut all the fabrics. The kitchen, well, the kitchen was still the kitchen.”
By 1997, the line was raking in nearly $40 million USD thanks to brand ambassador, LL Cool J, who began wearing FUBU in various music videos. A year later, the clothing company reached its peak with sales over $350 million USD.
FUBU’s greatest strength and weakness was it’s popularity. Since it was readily available and everyone seemed to have at least one piece, John and his team amped up production which resulted in too much product and merchandise ending up in discount stores.
“We got so carried away with our early rush of success that we were busting at the seams, racing to get the goods out there, getting ahead of ourselves,” John wrote in a book he co-authored, The Brand Within. “Once you hit mark-down bins, it’s tough to climb out, because you’ve lost the sense that your clothes are fresh and vibrant,” he wrote.
With the exception of its footwear, FUBU left the U.S. market in 2003 and built business in Europe and Asia where worldwide revenues reached $200 million USD in 2009.
In 2010, John relaunched FUBU as FB Legacy using rappers like Soulja Boy, Roscoe Dash, and Slim Thug as spokesmen for “sportswear for the modern man that will compliment any wardrobe.”
Today, FUBU is technically still active and has a website indicating a launch date of January 24 for a yet-to-be-announced third chapter for the brand.
Jonas Bevacqua and Robert Wright founded LRG in Irvine, CA in 1999 with an initial $200,000 USD investment. The former was a valet and the latter was a DJ who had dabbled in producing hip-hop-inspired clothing.
Together, they introduced the world to what would become known wider as “streetwear,” but at the time spoke to themes of “staying up late and getting blasted and thinking [about] weird and meaningful stuff.”
Bevacqua was particularly inspired by his own upbringing. After being adopted as a young child, he had a black brother and sister, Filipino brother and sister, half-white-half black sister, half Jamaican-half-Spanish brother and a white brother.
“I grew up in a pretty unique environment and was exposed to a lot of different things,” Bevacqua told the Register in 2009. “I didn’t feel there was a clothing company to bridge the gap among all these different things that we were into – that spoke for that melting pot of what was going on. That’s what LRG was all about.”
In 2006, Entrepreneur magazine estimated the company’s annual revenue at $150 million USD and ranked LRG fifth among the 500 fastest growing companies that year.
One of LRG’s greatest strengths was it’s ties to the hip-hop community. Whereas FUBU aligned themselves with chart toppers, LRG was more strategic and sought out artists who spoke to their “hustle trees” message and had more of an underground appeal.
Artists like Black Thought of the Roots and Talib Kweli were one of many artists to grace their early advertisements.
LRG was also one of the first major supporters of Kanye West from a print standpoint – aiding him in the marketing of his debut album, The College Dropout.
In 2011, Jonas Bevacqua was found dead at 34 in his Laguna Beach home. The Coroner’s Office revealed that at the time of death, he was sick with pneumonia and myocarditis (inflammation of the heart muscle).
“Jonas was a star who burned brightly in the sky and who is gone too soon,”a statement from LRG read. “There is a hole in our hearts that will never be filled. He will always be loved and missed by his friends, family and those he inspired.”
Today, LRG remains in major stores like Tilly’s, Macy’s, Zumiez and Dillards.
Marithé + François Girbaud
Marithé Bachellerie and François Girbaud started their denim company in France in 1964. Soon after, they revolutionized a wear pattern that would come to be known as “stone washing” by infusing pumice stones into equation.
“We invented the industrial fading,” Girbaud said. “Because it’s true that we invented the stone wash, and different forms like the `baggy’ jean etc. But this isn’t the most important thing, what is important is when you start to wash it, to make clothes with the idea that they will be worn and used. And before us, this didn’t exist, the clothes were washed simply for hygienic reasons and for nothing else.”
By 1972, they would have their own standalone boutique in Paris.
Girbaud’s two major products that got people’s attention was 1998’s “Shuttle” – with high waist, baggy fit and velcro straps that cinched the pants in the thigh and ankle – and Brand-X which was a more tractional five pocket silhouette.
In the early 1990’s, Girbaud jeans references started appearing in rap lyrics – including artists like De La Soul, Del the Funkee Homosapien, Biggie, Pete Rock, OutKast, Master P, Common and more.
Between the Brand X, the Shuttle, and other products, Girbaud sales would go on to peak at $83 million USD in 2005, before crashing to $37 million USD in 2007 – the last year for which the company publicly submitted an annual report.
In 2007, François Girbaud found himself in hot water after making disparaging remarks, stating, “Somewhere, the company was running too much in some direction, too much in hip-hop stuff. To be just connected in the hip-hop stuff is other brand; there is people like Russell Simmons or Damon Dash or Puff Daddy or all this kind. I’m not the rap people. Sure, we introduced the baggy jeans, we introduced stonewashed and all this stuff in the 60’s or 70’s, I never target just to be ethnic. It’s stupid.”
In 2012, Marithé & François Girbaud filed for the French equivalent of Chapter 11 bankruptcy protection.
Before his colorful imagery got bedazzled on trucker hats, T-shirts and sweatshirts, tattoo artist, Don Ed Hardy, was as respected a purveyor of ink as any in the United States.
However, his name became synonymous with celebrity excess and poor design sensibilities after denim designer and Von Dutch alumnus, Christian Audigier, secured a master license for Hardy’s catalog of tattoo images.
Years later, Hardy told CNN that the agreement made his name synonymous with the “douches” of pop culture and ultimately cheapened his personal brand.
In 2008, Ed Hardy did in the neighborhood of $80 million USD in business. A year later, it exceeded $700 million USD and was available in seemingly every mall location around the States. As is the case with most “hype,” this was good for the bottom line but bad for the “cool factor.”
Despite it’s negative connotations at the time, Simon Doonan, creative ambassador-at-large for Barney’s New York, surprised many by praising the Ed Hardy line in the New York Observer.
“Criticizing Ed Hardy for being cheesy is like saying that Elvis was ‘flashy’ or that Liberace was ‘tacky,’ It’s a giant case of DUH! Of course it’s cheesy! That’s the whole point, you doo-doo heads. Ed Hardy is fromage-y and hedonistic and naughty and badass and—the ultimate crime in the world of haute fashion—Ed Hardy is FUN!”
Less than nine months after the company was named as the sixth fastest growing company in BRW magazine’s Fast 100 list, Ed Hardy was placed in the hands of administrators after a string of store closures throughout the U.S. and Australia.
In a short statement, spokesman, Simon Wallace-Smith, said the collapse had been caused by “slowing sales and the competitive nature of the retail industry. The aim of the voluntary administrators will be to evaluate the financial position of the companies and to investigate options to restructure the business.”
In 2011, the master license for Hardy’s work was taken on by Iconix Brand Group who also represented other prominent brands of yesteryear like Ecko, Massimo, Starter, Zoo York and Rocawear.
The name “Aeropostale” comes from Compagnie Generale Aeropostale – a pioneer airmail company that was the first ever to fly between France, South Africa and South America. Thus, the early Aeropostale retail stores reflected its aviation history by placing gasoline pumps, propeller biplanes and parachuting mannequins at the entrance of their mall locations and also had video monitors embedded in the floor that showed Top Gun on an endless loop.
Its clothing items also contained a similar aeronautical feel – lauded for its bomber jackets, baggy pants and khaki staples that The New York Times referred to as, “rugged leisure.”
Owned by R. H. Macy & Co., the veteran retailer steered clear of their own branding in favor of merely being stockists for the upstart brand which began expansion out of New York City in 1987.
“We looked at the specialty store business as an alternative method of distribution after we had had success with our private label program,” said Mark S. Handler, Macy’s president.
“We see specialty retailing as a potentially very profitable cousin to a department-store business,” said Edward S. Finkelstein, chairman and chief executive officer. “We have launched Aeropostale with great care and enthusiasm, and we are ecstatic with the customers’ response”
Two years after the initial launch, Macy’s operated 35 nationwide Aeropostale stores.
In 2004, Bloomberg placed the brand as the top retailer on its Hot Growth list – noting that its earnings over the past three years had jumped an average annual 88%, to $54.3 million USD, on average yearly sales growth of 54%, to $734.9 million USD. The company at that time had 494 mall stores and a market cap of $1.3 billion USD.
At its peak in 2010, Aeropostale was valued at $3 billion USD on the stock market.
In stark contrast, in April of this year, Aeropostale’s shares were delisted by the New York Stock Exchange after shares traded below $1 USD for an extended period.
As of May 2016, Aeropostale planned to close 113 U.S. stores and all 41 Canada stores as part of its Chapter 11 bankruptcy.
According to the filing, 117 of the stores set to close were not profitable and were responsible for $17 million USD in losses in 2015. The other closing stores “experienced poor or negative sales trends and no longer fit within the debtors’ business plan,” according to the filing.
Abercrombie & Fitch started Hollister Co. in 2000 – selling colorful T-shirts, cotton hoodies and faded jeans – which loosely reflected the out-of-water vibes favored by surf enthusiasts.
“Everybody tried to knock off the surf lifestyle at all distribution channels—from Costco to Kohl’s to JC Penney,” recalled Dick Baker, Chairman Emeritus of the Surf Industry Manufacturers Association (SIMA). “Generally speaking most were not successful. Why? They didn’t have the consumer, the kids didn’t shop in there, it wasn’t cool, and they didn’t have any of the brands. What’s changed is that along comes Hollister and it does vertical surf better than most surf companies. To the average consumer that’s not a core kid, from a product and price perspective, and as an environment to shop, it has become a brand unto itself.”
Much in the same way that Aeropostale crafted retail environments which spoke to aviation, Hollister locations channeled beach vibes with stores that resembled beach shacks and had live feeds of the surf conditions at Huntington Beach pier.
Although the brand was an upstart label, Abercrombie executives – including Michael Jefferies – conjured up a fabricated backstory for Hollister in an attempt to add further credence to their legitimacy in the space.
While on assignment for The New Yorker, writer Dave Eggers, unearthed internal documents as it related to Hollister’s made up history.
“John M. Hollister was born at the end of the nineteenth century and spent his summers in Maine as a youth,” the story went. “He was an adventurous boy who loved to swim in the clear and cold waters there. He graduated from Yale in 1915 and, eschewing the cushy Manhattan life suggested for him, set sail for the Dutch East Indies, where he purchased a rubber plantation in 1917. He fell in love with a woman named Meta and bought a fifty-foot schooner. He and Meta sailed around the South Pacific, treasuring ‘the works of the artisans that lived there,’ and eventually settled in Los Angeles, in 1919. They had a child, John, Jr., and opened a shop in Laguna Beach that sold goods from the South Pacific—furniture, jewelry, linens, and artifacts. When John, Jr., came of age and took over the business, he included surf clothing and gear. (He was an exceptional surfer himself.) His surf shop, which bore his name, grew in popularity until it became a globally recognized brand. The Hollister story is one of ‘passion, youth and love of the sea,’ evoking ‘the harmony of romance, beauty, adventure.’”
This wasn’t the first time Jefferies had used false lineage for Abercrombie brother and sister brands – having used the strategy also for Gilly Hicks and Ruehl No. 925.
According to Transworld Business, Hollister Co. did $1.6 billion dollars in sales with 450 stores open across the United States, and the brand ranked first for four consecutive seasons as Teens’ Top Clothing Brand since 2007.
In 2009, Hollister had 500 clothing stores across the U.S., Canada and the United Kingdom. Four years later, there were 587 stores around the world – netting the company more than $2 billion USD in sales.
Although their appeal has dwindled considerably, Hollister is still very much a retail player – aided by missteps and bankruptcies by competitors which allowed them to continue to corner the niche marketplace.
“Long term, we expect Hollister and Zumiez to benefit from the reduced competition,” analysts wrote in May 2016.
- Featured/Main Image: LRG