Home / Knowledge / News / Apparel/Garments / Improved product quality helps boost sales - Dov Charney

Improved product quality helps boost sales - Dov Charney

Mar '12
American Apparel Inc, a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel, announced its financial results for the fourth quarter and year ended December 31, 2011. The Company also provided guidance with respect to its expected 2012 performance.

Summary of Fourth Quarter 2011 Financial Performance (4Q 2011 vs. 4Q 2010)
Comparing the 2011 fourth quarter to the corresponding period last year, the Company reported that:

• Net sales increased 9% to $157.6 million on a 7% increase in comparable store sales, a 19% increase in online sales, a 6% increase in wholesale net sales and a 9% decrease in the average number of stores. In addition, total net sales increased as a result of extensive warehouse-type clearance sales conducted in the 2011 fourth quarter.
• Gross margin decreased to 53.2% from 55.6% due primarily to higher raw material and manufacturing overhead costs, the effect of lower margins on warehouse clearance sales and promotional activities. Partially offsetting these reductions were the impacts of reduced shrink and lower manufacturing direct labor expense.
• Operating expenses decreased $5.8 million driven by lower occupancy expenses as the result of fewer stores and lower professional fees.
• Cash generated from operating activities improved by $17.1 million to $12.2 million.
• Adjusted EBITDA improved by $9.6 million to $9.1 million from a previous year loss of $0.5 million.
• Net loss per share was $0.11 in 2011 vs. $0.27 in 2010.
• During the quarter the Company opened five retail stores and closed three to end the year with 249 stores worldwide.
• The existing senior credit facility due to mature in July 2012 was replaced with a new three year senior credit facility. In addition, the second lien loan due on December 31, 2013 was extended to December 31, 2015. Accordingly, after considering the refinancing and recent operating performance improvements, the Company has concluded that there no longer is substantial doubt about its ability to operate as a going concern.

Summary of 2011 Financial Performance (2011 vs. 2010)
• Net sales increased 3% to $547.3 million on flat comparable store sales, a 17% increase in online sales, a 2% increase in wholesale net sales and a 9% decrease in the average number of stores.
• Gross margin increased to 53.9% from 52.5% in 2010 due to significantly improved manufacturing efficiency. The manufacturing cost improvement was partially offset by an increase in yarn and fabric costs and unit cost increases associated with factory overhead due to lower production levels.
• Operating expenses decreased $11.8 million driven by lower occupancy expenses as the result of fewer stores and lower professional fees.
• Cash generated from operating activities was $2.3 million, an improvement of $34.7 million.
• Capital expenditures decreased $4.6 million to $11.1 million.

Must ReadView All

Pic: Shutterstock

Textiles | On 29th Feb 2020

Nepal's pashmina sector gets European Union boost

A new project funded by the European Union to strengthen Nepal's path ...

Pic: Shutterstock

Apparel/Garments | On 29th Feb 2020

Coronavirus outbreak hits Thai garment industry

The coronavirus outbreak has been affecting the Thai apparel industry ...

Pic: Shutterstock

Retail | On 29th Feb 2020

Indian govt clarifies on sourcing of goods from SEZs

Goods procured from units in special economic zones (SEZs) by...

Interviews View All

Top executives, Fashion houses, India

Top executives
Fashion houses, India

With technology, it has become easier to ensure IPR

Top executives, Retailers

Top executives

Weak rupee breeds inflation

Rajiv Sirohi, Shara

Rajiv Sirohi

‘Portugal is taking away a major share of the mill made sector.’

Hans Gerhard Wroblowski,

Hans Gerhard Wroblowski

Germany's Monforts is a leading manufacturer and exporter of textile...

Suresh P Bagrecha,

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Francesco Gozio,

Francesco Gozio

Italian company Marzoli is a leading manufacturer of the complete line of...

Johan Berlin, InvestKonsult Sweden AB

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Mr Hartmann Huth, Trevira GmbH

Mr Hartmann Huth
Trevira GmbH

Trevira GmbH is an innovative European manufacturer of high-value branded...

Kerem Durdag, Biovation II LLC

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Chandani Sahi, By Chandani

Chandani Sahi
By Chandani

By Chandani is a womenswear prêt couture brand with fusion silhouettes by...

Bani Batra,

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Aprajita Toor, Aprajita Toor

Aprajita Toor
Aprajita Toor

The creations by Aprajita Toor were born out of a deep desire to create...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

February 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

Advanced Search