American Apparel

A. Problem / Opportunity Issue Statement

A1: Who is the Decision Maker? (In analyzing the case, put yourself in the decision maker’s role and try to figure what you would do in his/her position.)

* Dov Charney, CEO of American Apparel.

A2: What is the main problem(s) or opportunity that you (as the decision maker) must deal with?

* The main problem faced includes consumer complaints and growing controversy over the sexual-based advertising campaign carried on by American Apparel.

A3: Why is this issue important and how urgent is it?

* The issue is important because Dov wants to make American Apparel a lifetime brand but its situation right now is very drastic due to the social responsibility and due to the bad image of Dov being made for various cases against him, has been observed as a shortfall to the company.

A4: Provide any sub-issues that are relevant to the problem / opportunity.

* Charney faced a $250 million-dollar sexual harassment lawsuit – a case filed by a 17 year old girl who claimed that she was pressurized by Charney to have sex with him when he turned 18.

* Charney was also accused of various sexual harassment cases by several other employees that he kept the nude photos of his employees and also of American Apparel models. HE was charged for creating a hostile working environment, and of wrongful job terminations.

* Although, all the cases were settled outside the court but the brutal image of Dov still grew in the market and in the industry.

A5: Who are the key people and/or groups that you need to consider in solving the problem / opportunity?

* Dov Charney

* Employees of American Apparel

* Consumers/Buyers of American Apparel

* American Apparel

B. Key Fact of the Case (relevant facts only, no analysis) – 10 Marks

B1: Provide the relevant background that led to the problem / opportunity.

* Launched in 1988, as a publically traded company for unisex clothing...