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Sustainability in the fashion industry essay
Sustainability in the fashion industry essay
Fashion sustainability essay
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Introduction
American Apparel is a well-known clothing brand and company across the world. Basically AA is a manufacturer, distributor, and retailer of clothes with its headquarters based in the Los Angeles, California, U.S. Today it is known to everyone that this company is a sweatshop-free, vertically integrated, with a robust CRS stance which strongly supports the workers’ rights and tries to legalise the illegal foreign workforce of the American clothing industry. American Apparel is also known as a corporation that rejects the typical fashion ads and performs its own design, marketing, and advertising of fashionable clothes. If American Apparel is such a cool and innocent company how come they lost consumer interest and experience a downturn in sales revenue?
This research will take In-depth look at the key platforms of AA mentioned above and will carry out an analysis to examine, if any of those platforms contributed to the company’s current downturn. In addition American Apparel and its business model will be compared with its main competitors in the industry, to uncover what other (if any) business models are successfully in operation.
Dov Charney and American Apparel
Dov Charney is a Canadian-born founder, president and Chief Executive Officer of American Apparel Inc. According to Reuters (2013) AA operated 251 fully owned retail stores in twenty countries as of January 31, 2013 and still runs an online website that serves customers from more than sixty countries worldwide up-to-date. It is not an easy job to run such a big business, no wonder AA employs more than twelve thousand employees worldwide. It is also understandable that the competition is very strong in fashion apparel industry, as it has many major players l...
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...businessweek.com/bwdaily/dnflash/content/may2009/db20090518_942184.htm [18 November 2013].
16. American Apparel Inc. (2013). Financial History: 10-K Annual Report. Available at: http://files.shareholder.com/downloads/APP/2812271912x0xS1336545-13-9/1336545/filing.pdf (Accessed 20 November 2013).
17. H&M (2012). Annual Report 2012. Available at: http://about.hm.com/content/dam/hm/about/documents/en/Annual%20Report/Annual-Report-2012_en.pdf (Accessed 20 November 2013).
18. Hansen S. 2012, ‘How Zara Grew into the World’s Largest Fashion Retailer’, The New York Times, 9 November. Available at: http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?pagewanted=all&_r=0 [19 November 2013].
19. Inditex (2013). Inditex Press Dossier. Available at: http://www.inditex.com/en/downloads/ITX-Dossier-p12-en.pdf [19 November 2013].
One look at the common-size income statements for these companies can tell a story. While Jones Apparel Group was lagging at year ended 1998, even with a restructuring charge on Liz Claiborne’s income statement, 1999 was a different story. Huge growth at Jones lead to revenues double of that one year ago while Liz, while increasing, was quickly falling behind. The growth for both of these companies continued into the year ended 2000, but Jones Apparel Group’s results were brilliant compared to Liz Claiborne’s. One billion dollar growth in revenues as well as higher net income is making Jones Apparel Group the company of the future.
Wal-Mart is the world’s largest retailer, operating more than 5800 discount stores. Wal-Mart employs more than 1.5 million associates 885,000 in the United States and 225,000 internationally. Walton had a reputation for caring about his customers, his employees, and the community. In order to maintain its market position in the discount retail business, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simple tastes and took a keen interest in people. He believed in three guiding principles: 1.Customer value and service; 2.Partnership with its associates; 3.Community involvement.
The American brand Abercrombie and Fitch (ANF) is a retailer selling fashionable and luxurious sportswear clothing, and accessories.
Yes there employee practices at A&F could be categorized as discriminatory. Discrimination is defined as the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex. There was a very public case of discrimination. 17 year old Samantha Elauf applied to work at Abercrombie at a mall in Tulsa Oklahoma in 2008. The assistant manager who interviewed her deemed her qualified but worried that her hijab would violate the company’s “Look Policy,” (Talbot). The case was published in numerous news outlets one of them being an article from the New Yorker which brought up what is meant by discrimination in this case. “Any employer can have a dress code, of course, but it cannot use
According to the Kohl’s Corporation Hoover Report (2014), in the late 1920s, a man named Max Kohl opened a grocery store in Milwaukee, Wisconsin (Hoover Report, 2014, pg. 9). By 1938, Max and his three sons had developed his store into a successful chain and incorporated the business. Max Kohl had experienced enough success by 1962 that he opened a department store right next to his Kohl’s grocery store. In 1972, Max Kohl and his family’s “65 food stores and five department stores were generating about $90 million in yearly sales” (pg. 9) In the same year, the British American Tobacco’s Brown & Williamson Industries (BATUS) purchased 80% of the Kohls’ two operations. Six years later, BATUS proceeded to purchase what remained of Kohl’s. In the early 1980s, BATUS decided that “Kohl’s discount image did not fit in with BATUS’s other retail operations” and decided to ultimately separate the two operations in order to put them up for sale (pg. 9). The president and chief executive officer at the time, William Kellogg, “and two other executives, with the backing of mall developers Herbert and Melvin Simon, led an LBO (leveraged buy-out) to acquire the chain’s 40 stores and a distribution center” (pg. 9). By the time Kohl’s managed to go public in the year 1992, they “had 81 stores in six states, and sales topped $1 billion” (pg. 9). At this time Kohl’s began its expansion and within the next five years managed to top sales at two billion dollars. Kohl’s then “acquired a former Bradlees store to enter New Jersey and opened stores in Washington, DC; Philadelphia; New York; and Delaware” (pg. 9). The following year Kohl’s managed to expand into Tennessee by adding new stores. The company named Larry Montgomery CEO in 1999 and short...
Annual Report 2012 Costco Wholesale: Year Ended September 2, 2012 [PDF document]. 1-7. Retrieved from Costco Wholesale Financial Reports:
Now, as with most business ventures, competition can be a disadvantage. Our research shows that there is already a high volume of undergarment lines in England, i.e. Stella Mccartney, Hanes, Mimi Holliday, La Perla etc. The great success of these lines is proof of...
The company Hennes and Mauritz (H&M), is the world’s second-largest clothing retailer. The founder Erling Persson, started the company in Vasteras, Sweden in 1947 (UKEssays, 2017). H&M’s presence extends to 37 countries and their online stores is available in 41 markets (H&M, 2017). H&M’s business notion is to provide its customers with stylish and quality clothes at the best price (H&M, 2017). The group is constantly growing, as more stores and markets are being added every year. Their expansion plans were probable since the company formatted its corporate strategy in line with the HR strategy. When expanding into new markets, H&M does not lose sight of their core values.
This new hip clothing store has labeled itself a sweatshop free. It employs over five thousand people at the Los Angeles location (Li par 27). This is incredible. It has given the people of Los Angeles many opportunities to improve their lives and to keep a steady job. The employees here are able to pump out around 200,000 garments of clothing per day (Li par 27). This is a great amount of production. This is in part due to how well the employees are treated. Shan Li describes their benefits as, “American Apparel's factory workers earn an average of $12 an hour. They have access to $3 subsidized lunches, an on-site medical clinic and free massages” (par 29). Being treated with respect often makes employees work harder because of the good relationships they have with their bosses. This is clearly shown by how much clothing is produced daily. American Apparel is a business that other American clothing companies can look to for guidance. With their annual sales of 634 million dollars, this store has shown what is possible for production in the United states (Li par
This has been possible through a remarkable and strategic supply chain of the company. Design, purchasing, production, distribution, and retailing are arranged in very unique way. Zara produces clothes that are not so much dissimilar to other manufacturers, but they beat them to the market (Sartal et al., 2017). The company has employed a policy that use less expensive fabrics, which has helped them to dispose the products at a lower price as compared to other competitors. Pricing policy at Zara has given the company a resounding marketing advantage that has helped it compete effectively in the congested industry. Supply chain has given the company due competitive advantage and it has been able to maintain it by design, warehousing, distribution, and logistics functions (De Jorge Moreno, & Carrasco, 2016). Zara has made this possible by design the organization, operational procedures, performance measures and even office configurations that has helped the flow of information and product easy. Zara manufacture its products in small quantity, which make the products, last in the stores for a small time and give it easy to manage and change the fashion depending on trends. To help the company meet its distribution and customer demands, the company has implemented a scheduling techniques, centrally managed inventory, reduced design cycle time, strong it system and logistics and distribution channels that were
Tommy Hilfiger, it's a household name now. The patriotic red, white, and blue flag is as well known as the McDonald's arches. Chances are you probably own at least one of his products, jeans, sunglasses, shirts, suits, wallets, underwear, and the list goes on. People of all races, sex, and ethnic background wear his clothing and seem to have no problem paying substantially more money just to have the "Tommy" logo plastered on it. Those who wear Hilfiger are proud of the image it creates for them, they tend to be instilled with a sense of all the things Hilfiger stands for regardless of any controversy that may surround him..
Petro, G. (2012, November 5). The future of fashion retailing --- the H&M approach (part 3 of 3). Retrieved from http://www.forbes.com/sites/gregpetro/2012/11/05/the-future-of-fashion-retailing-the-hm-approach-part-3-of-3/
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
Fast fashion allows consumers to get the latest styles presented in catwalks at a very cheap price. According to Walter Loeb, a former senior retail analyst for Morgan Stanley and a current contributor to Forbes, explains that companies like Forever 21, H&M, and Zara have made a push to get the latest styles in fashion into these stores as soon as possible, before the clothing becomes last season’s style. It is something that works perfectly for retail stores, as Loeb explains, “Many new ideas from the fashion shows that just finished in New York, Paris and Milan will soon be on Zara’s racks.” This means that stores are always in a rush to get their garments sold, before they are out of style six months later. One of the best benefits for retailers is that, because of the high demand of the latest styles, clothing sells very quickly and once it sales out instead of replenishing, they will just replace the garments with new styles coming fresh off the run floor (Stanley). This strongly encourages consumers to buy a piece of clothing that they like when they see it, otherwise there is a good chance it will not be there when they return. It is a perpetuating cycle whit no end in sight. This trend encourages shoppers to be more impulsive than they otherwise would be if he or she knew that the piece of clothing that they really liked was going to
Zara’s business model can be broken down into three basic components: concept, capabilities, and value drivers. Zara’s fundamental concept is to maintain design, production, and distribution processes that will enable Zara to respond quickly to shifts in consumer demands. José María Castellano, CEO of Inditex stated that "the fashion world is in constant flux and is driven not by supply but by customer demand. We need to give consumers what they want, and if I go to South America or Asia to make clothes, I simply can't move fast enough." This highlights the importance of this quick response time to Zara’s operations.