American Apparel was the 'Made in USA' fashion icon — then scandals and debt sank it

American Apparel was founded in 1989 by Canadian Dov Charney and grew to become one of the most recognizable fashion brands of the 2000s. The company was vertically integrated, manufacturing all its clothing at a single factory in downtown Los Angeles. It went public in 2006 via a reverse merger and ranked No. 308 on the Inc. 500 list with 440% three-year growth and revenues over $211 million. By 2007 it sold about $125 million of domestically made clothing abroad.

Charney's leadership was controversial from the start. He faced multiple harassment lawsuits and was known for provocative advertising. In 2009, an ICE audit forced the company to fire about 1,500 undocumented workers, devastating its manufacturing workforce. In June 2014, the board ousted Charney as CEO after further allegations of misconduct. The controversies scared off investors and lenders, and the company warned it might not have enough cash to operate.

American Apparel filed for Chapter 11 bankruptcy on October 5, 2015. It rejected a $300 million takeover bid in 2016. In 2017, the company was acquired by Canadian sportswear manufacturer Gildan Activewear for $88 million. Gildan moved most production to Honduras and Nicaragua, abandoning the 'Made in USA' model. The brand survived as a name but the vertically integrated LA factory — the core of what made American Apparel unique — was gone.