Los Angeles Apparel: Locally Made in a Global Market

Abstract

This case takes place during Los Angeles Apparel’s second full year of operation. Manufacturing fashion basics such as tee shirts and leggings, the company’s operations are located entirely in Los Angeles, eschewing the typical international apparel supply chains. The central figure in the case is founder and CEO Dov Charney. A nationally known figure, Charney was previously the founder and CEO of American Apparel, an apparel manufacturer and retailer, which at its peak reached annual sales in excess of $600 million and operated almost 300 stores across 20 countries. Charney’s controversial management style made him both famous and infamous and his tenure as CEO came to an end in 2014 when he was ousted by the company’s board. In 2016, Charney founded Los Angeles Apparel with a desire to recreate what he saw as the best aspects of American Apparel – local and ‘sweatshop free’ manufacturing. Following the same trajectory as the earlier company, Charney began by focusing on wholesale B2B channels. He had recently added a B2C ecommerce channel and was considering opening brick-and-mortar stores in the near future. But much had changed in the two decades since American Apparel’s initial success. Which path forward was best for Los Angeles Apparel in current environment?