College of Business & Economics' students at California State University, Los Angeles won the "Outstanding Student-written Case Award at the 2007 Annual Meeting of the North American Case Research Association (NACRA)". The NACRA meeting is the most prestigious case research conference, and our students competed against doctoral and masters students from universities in the USA, Canada, Mexico, Europe, Australia, and Asia.
The winning case study was “American Apparel,” by Christina Eaves, Lisa Tousant, Sandy Johnson, Sheridan Mascarenhas, and William Drescher (students) under the supervision of Ellen Drost and Steve McGuire (Management Dept. faculty). Below find a synopsis of the case study, one in a series of case studies we are preparing on L.A. Entrepreneurs.
American Apparel: Case Synopsis
American Apparel, Inc. was about to change from a private firm to a publicly traded company. It had become the largest vertically-integrated garment manufacturer in the U.S., bucking a trend in the garment industry to outsource manufacturing to low cost countries. Its founder and CEO, Dov Charney, was a self-proclaimed hustler whose style generated controversy that most publicly traded companies eschewed. Charney’s open and frank attitude about progressive social issues and sexuality stirred up media feeding frenzies; the provocative photos he selected for American Apparel’s ad campaigns grabbed people’s attention – not always in a positive way. The very way the company had chosen to go public indicated much about the CEO’s refusal to conform to tradition: in summer 2007 American Apparel would merge with the publicly traded specialty acquisition corporation, Endeavor. The company’s commitment to paying high wages and generous benefits to its mostly immigrant workforce, and its “Made in USA” stance might not appeal to Wall Street investors who believed that an adequate return on investment took priority over political correctness. What changes would American Apparel need to make once it became a publicly traded company? Could it maintain its expensive manufacturing base in Los Angeles? Would outsiders’ scrutiny of its CEO, its provocative marketing, and progressive personnel policies and social agenda force the company to make changes in strategy and culture?
