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you all have any opinions on APP these days. She's been on a tear since the deal was completed and after the initial sell-off. I love this company and believe this is under the radar big time!
Large LES American Apparel to Become More Massive
Friday, December 14, 2007, by Leslie Price
The rumors swirling about American Apparel's expansion into 199 Orchard are true. A tipster writes: "The LES American Apparel is expanding into the space that was a restaurant behind it. I walked by this evening, and saw that they had already knocked down the wall that divided the two spaces. I turned the corner onto Houston, and saw employees loading boxes into the store from an AA truck. I assume there was clothing in the boxes." More evidence: On PropertShark, the phone records for the storefront at 199 Orchard Street have been switched from Big John, the last tenant, to American Apparel.
(note: LES is lower east side for those who don't know new york)
read the pr. It said they can call the warrants at .01 today I think.
Your stock is ok.
Scottrade didn't change it either. When I called they said there was no "date" to do it on ? Is that part of the reason the price is down ? or is it the extra shares ? strange....
Etrade never gave me the switch...anybody else?
All of the garments we buy from AA wholesale have their tag sewn in. I have found that many of the retailers who buy from us are thrilled to have the AA tag in there. The name brand recognition is clearly very strong. With that said, I've never inquired if they offer a private label program (many blanks suppliers do).
We do a fair amount of work for Disney. My understanding is that upon receipt of the goods from us, their screen printer (we only do the tie-dyeing for Disney) cuts out the AA tag and sews a Disney tag right onto the "neck tape". The garment we dye for them has been the 4305, women's baby doll-t. I'm pretty sure this was the original garment offered by AA.
FWIW, Dov Charney obviously built a tremendous business with American Apparel, but his reputation in the industry is shaky (at best). Having an experienced team with EDA...or now APP..running the show, I think we'll see tremendous success with American Apparel and our investment here.
Best regards,
Geoff
I'm also very bullish about AA's wholesale business. One question I have for you though. Does AA sell untagged items allowing other companies to put their own tags on, or do all the wholesales items still have AA tags, and other companies just sell screen-printed AA branded clothes?
active today?
New ticker symbol I see. APP
never mind I'll just sell my warrants on Friday
While the retail stores will obviously be the big driver for AA revenues, something that might not be focused on is AA wholesale revenues. I own a relatively small ($3 million revenues for 2007) t-shirt/clothing wholesaler (we tie-dye and/or screen print on garments), and have tremendous success with American Apparel garments. We buy direct from AA and two of their east coast distributors. In 2007 we purchased approximately $140,000 of blank AA goods. There are countless other wholesalers who use AA products, many of whom are FAR larger than my company. I believe the wholesale revenues will be a material part of AA earnings, even as more stores open.
Having the wholesale income to supplement the retail store-derived income makes AA a doubly good story.
Disclosure: Just purchased EDA stock for the first time last week. I'm generally a long term buy and hold type of investor.
Best regards,
Geoff
can anyone tell me how to convert warrents..BY FRIDAY read previous msg..TIA
Endeavor Acquisition Corp. Announces Stockholder Approval of Merger with American Apparel
Wednesday December 12, 12:19 pm ET
-- Business combination consummated
-- Endeavor Acquisition Corp. changes name to American Apparel, Inc.
-- Ticker symbols of common stock, units and warrants to change to APP, APP.U, and APP.WS, respectively, no later than Friday, December 14, 2007
-- Post-effective amendment for shares underlying warrants declared effective
NEW YORK--(BUSINESS WIRE)--Endeavor Acquisition Corp. (AMEX: EDA - News, EDA.U - News, EDA.WS - News) (“Endeavor”), a public company formed to effect a business combination with an operating business announced that its stockholders have approved the merger with American Apparel and its affiliated companies. The vote to approve the merger took place today at Endeavor’s special meeting of stockholders. The closing of the transaction took place immediately thereafter. Endeavor has changed its name to American Apparel, Inc.
ADVERTISEMENT
Endeavor’s common stock, units and warrants will continue trading on the American Stock Exchange under the new symbols APP, APP.U and APP.WS, respectively. This symbol change will occur no later than Friday, December 14, 2007.
In addition to approving the merger, Endeavor stockholders also approved the 2007 Performance Equity Plan and certain amendments to Endeavor’s certificate of incorporation, including the change of name.
The combined companies also announced that Endeavor’s post-effective amendment to its Registration Statement on Form S-1 (File No. 333-128440) has been declared effective. This Registration covers the issuance of shares by Endeavor upon exercise of its outstanding publicly traded warrants. As of the date hereof, Endeavor has 16,160,745 warrants outstanding, each of which entitles the holder to purchase one share of common stock for $6.00. The warrants expire on December 14, 2009 at 5:00 p.m., New York City time. Endeavor may call the warrants for redemption:
• in whole and not in part;
• at a price of $0.01 per warrant at any time after the warrants become exercisable;
• Upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
• if, and only if, the reported last sale price of the common stock equals or exceeds $11.50 per share, for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders, which period may begin prior to consummation of the American Apparel merger.
Under the terms of its prospectus, Endeavor has agreed that in connection with any redemption of the warrants, Endeavor will afford all of the holders thereof the right and opportunity to exercise their warrants on a “cashless” basis utilizing the value of such warrants based on the difference between the then current market price per share of Endeavor common stock and the per-share exercise price of the warrants following the formula described in the Registration Statement. As of December 11, 2007, the reported last sale price of the common stock equaled or exceeded $11.50 per share for at least 20 trading days within the last 30 trading day period.
About American Apparel
American Apparel is a vertically-integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of December 1, 2007, American Apparel employed over 6,700 people and operated over 175 retail stores in 13 countries, including the United States, Canada, Mexico, United Kingdom, Germany, France, Italy, the Netherlands, Sweden, Switzerland, Israel, Japan and South Korea. American Apparel also operates a leading wholesale business that supplies t-shirts and other casual wear to distributors and screen printers. In addition to its retail stores and wholesale operations, American Apparel operates an online retail e-commerce website.
Forward Looking Statements
This press release, and other statements that Endeavor or American Apparel may make, including statements about the proposed acquisition of American Apparel, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Endeavor’s and American Apparel’s future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.
Endeavor cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Endeavor assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
In addition to factors previously disclosed in Endeavor’s filings with the SEC and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance, including factors arising after consummation of the American Apparel Acquisition: (i) inability to continue to increase same store sales, (ii) failure to open and operate additional retail stores in desirable locations on a cost-efficient basis (iii) inability to anticipate and respond to consumer fashion trends and demand as they arise, (iv) increases in prices of the raw materials used in the manufacture of apparel goods, (v) failure to maintain satisfactory labor relations, (vi) inability to creatively and effectively promote the American Apparel brand, (vii) failure to hire and retain talented personnel and (viii) inability to effectively manage and replace as needed credit lines and other sources of financing.
This press release does not constitute an offer of any securities to be resold upon exercise of Endeavor’s outstanding publicly traded warrants.
Contact:
ICR, Inc.
Joe Teklits/Jean Fontana, 203-682-8200
--------------------------------------------------------------------------------
Source: Endeavor Acquisition Corp.
the new share count is higher than previously anticipated (it looks to be close to 80 mil) but this should prevent the need for a secondary. The supply demand equation should still be incredibly strong when the deal closes on the 12th. i expect to see $20 shortly after the announcement. With the cash infusion AA is getting they'll be able to open at least 20 new stores and easily surpass the average '08 estimate of 450 million. Lazard research is predicting $1B in sales by 2010. And we're trading at only about 3x sales. Fastest growth in the industry and cheapest p/s multiple of all the fast-growth retailers. Huge upside here.
I'm with you.
I think VRY has a $480 million target
( I think it's millions ? )
and TCW has a $ 360 million target .
Reuters Research Report had VRY rated an "Outperform", but I checked again today and it's been lowered to "Neutral".
If EDA is for real , plus these guy's past track record with other companies ( Office Supply , etc), It's going to be real hard not to jump in early on either or both stocks.
After checking out some of the other SPAC's out there I can see why there getting a bad rap, it's a real joke what some of these bozo's are buying with the shareholders $$ .
But I think the EDA guy's really do there home work before they leap.
Im not going to jump into the other two companies until they find a target, I dont think it is worth it to gamble purely on the EDA management team, they got lucky on this one with AA.
I don't know if it was someone initiating a short,but other than 11/13/07 and yesterday EDA would open HIGH and close LOW.
Some of that had to be the $12.35 price for the Acquisition,but for the most part EDA has been looking like it was going to start a rally and then out of nowhwere a $.40 low sell ??? Someone is shorting this badboy.
If it was someone covering then he's not doing it right !
(hahahaha).
I have a feeling that this is going to be BIG,and if so the same guys that put EDA together aren't wasting any time - they have two more Blank-Check Comp.for us
- TCW($9.02) and VRY($9.69).
How do you know it was someone initiating a short position at the high? To me it would make more sense that someone was covering an already short position after they saw LULU earnings and got worried. That would make sense to me because there was not a follow through of buying. Either way, LULU has had the same sell off after the initial pop. Its nice to finally get a discussion going here, thanks.
Check the Buyins.net - Naked Short List.
If I understand it correctly
The stock is being shorted , the $14.97 was the "SHORTER" selling his borrowed shares (I saw a 53100 volume at 9:41),He now has to replace the borrowed shares that he sold,look for a high volume buy at a price around the low $13teens. Good news is the closer we get to DEC 12th vote,the more risk the "SHORTER" takes to be able to cover his borrowed shares.
Buyins.net is reporting that there is 19.91 million shares outstanding and 3.93 million shares declared short as of October 2007, the failure to deliver in shares of EDA has not been resolved and a buy-in is imminent.
Good work on all the info on EDA !
what happened? a trade at $14.97? this thing is weird
Wow up 7% so far today. guess the news is getting out. 2 more people showed up.
EDA has two younger brothers
VRY and TCW . Both are "Blank Check" companies. A place to put our profits ?
I saw your $38 per share prediction
(nice ,that's where I had EDA also), I'm thinking it will level off after it's 1st "POP" around $31.Then when the
1st QTR reports come out in 2008........dare I say $64 ???????
How much damage has EDA had being on the "Naked Short List " ?
The other day it was trading at $12.85 with bids of $12.84,then out of nowhere a $12.70 buy and lower , thought we'd be in the low $14 by now.
very active trading today.
the voting proxy is expected to go out "by the end of november"
with the shareholders meeting to take place on Dec 12.
We're drawing near, "this could be the end of the beginning"
Paul Noglows, research director at Lazard (nyse: LAZ - news - people ) Capital Markets, smacked a home run for last year's bulls. A Love Only One newcomer in 2006, he went for Deckers Outdoor (nasdaq: DECK - news - people ), an idea supplied to Noglows by Lazard retail analyst Todd Slater. Deckers, which makes footwear (Teva, Ugg) and keeps beating earnings forecasts, rose 163%.
For 2008 Noglows goes with another Slater recommendation and picks Endeavor Acquisition (amex: EDA - news - people ), a holding company poised to acquire American Apparel of Los Angeles. Noglows believes the deal will close and that American Apparel, whose name Endeavor will assume once the acquisition is complete, is a company worth buying. A vertically integrated purveyor of casual wear like T shirts and underwear, American Apparel had 2006 sales of $265 million. Noglows expects revenues to hit $340 million this year and $1 billion by 2010.
http://www.forbes.com/free_forbes/2007/1210/134.html?partner=yahoomag
eda and lulu
i always hesitate to compare the valuations of EDA and LULU b/c LULU has received such a rich valuation. But the fact is there is no other vertically integrated retailer out there with AA's brand strength and same store sales growth above 20% except maybe AAPL. (I don't know their exact numbers but the business model is similar)
Abercrombie, American Eagle, J Crew . . . . all these companies are way past their peak growth levels so it's impossible to compare. Under Armour, Crox, Deckers, are all good comparisons in terms of product but none of those companies have the store expansion model of American Apparel. The only other retail company out there with SSS growth over 20%, eps growth 50-100% and looking to expand their store base by more than 4 fold is Lululemon. And the overall nu,bers are very comparable. So in terms of market cap, why shouldn't AA and LULU be mentioned in the same sentence?
LULU has higher sales and eps growth but AA has MORE THAN DOUBLE the total revenue. (ie LULU expects 150 million in '07, AA expects over 350 million) In '08, AA is expected to have double LULU's revenue again. LULU hopes to expand to 600 stores in the next several years. AA plans to reach 800-900. Both companies have approximately 68 million shares outstanding.
But LULU has a market cap of $2.6 billion while EDA has a cap of 880 million. At a cap of $2.6 billion (and keep in mind that is not assuming the same valuation of LULU only the same market cap) EDA would trade at the same price as LULU, in other words 38.
indeed there has been a muted reaction to really impressive earnings. this stock is generally ignored for many reasons (none of them valid). i have posted repeatedly on investorvillage.com as well and have received minimal interest. The recent realmoney.com article is the only one of its kind in existence and it was instigated by me!
american apparel has yet to be recognized by the media or by analysts as a publicly traded co. b/c of the stigma against SPAC's. this lack of interest is not something that should discourage you but instead should be looked at as a great opportunity. awareness alone is likely to drive this stock higher as the deal closes.
The lack of publicity and lack of movement after Q3 earnings were reported has been very odd. It is the only thing that has affected my confidence in this stock which I have otherwise thought of as an easy call. Q3 numbers are out, 27% same store sales, retail growth of 50%, why havent people jumped in here?
Thanks for your insight guys, im also suprised that you two have been the only ones on this board.
Disclosure: Ofcourse I am long.
might as well take advantage of it now before everyone finds out about it
i agree on all accounts. it's almost eerie how underappreciated this stock/co is. CNBC has done so many segments on retail over the last couple weeks and hasn't mentioned AA once! I scour the internet for retail blogs and analysis and almost never see EDA even mentioned at all.
once the merger is complete all that will change instantly.
i don't know the exact number of planned openings but here's a quote from the most recent PR:
Jonathan Ledecky, President of Endeavor stated, “We are delighted that American Apparel expects to significantly exceed its previous guidance of $40 million of pro forma adjusted EBITDA for 2007. American Apparel’s management has advised us that it has over 20 new store locations under signed leases and a significant number of additional new sites under development. We have agreed to increase the debt ceiling from $110 million to $150 million to allow American Apparel to continue its worldwide expansion.”
The last time I felt this confident about a stock I bought Nintendo (NTDOY) at $22.50 because I was so impressed with the Wii. Just take a look at NTDOY now. Just wait until American Apparel expands. I see at least 3 - 10 bags here if not more. Peter Lynch loves plays like these because of how quickly they can grow. Do we know how many stores they are planning to add over the next year?
Thanks for the hills note.
regardless of macroeconomic fears, this stock is cheaper than its peers even though it is the fastest growing store of its kind. Once the deal goes through officially, we are almost certain to see some analyst buy ratings and major institutional demand. with such a small float and a large short position the supply/demand outlook is going to cause explosive upside very quickly.
Just a note. American Apparel was mentioned on the mtv show The Hills. More proof of popularity.
October 4, 2007
Unkempt, Urban, Ubiquitous.
American Apparel's creative cottons take over the world, one track jacket at a time.
By Kara Nesvig
"I'll take a cranberry Flex-Fleece hoodie and a Hangover Hat with a side of '70s soft-core porn, please,"
... is what one would order at the American Apparel Café, should such a wonder exist. A waitress in a body-hugging, slightly nipple-exposing white leotard and knee-high gym socks would jot down your request, and then hand it to a vaguely ethnic-looking cook in a terrycloth leisure robe, headband, and gold lamé hot pants. Before you know it, your order is delivered to you wrapped in a no-fuss plastic bag. You marvel at the softness of the cotton, the deep deliciousness of the color, and at the perfection of the fit; so overtaken are you by wonder at such perfect simplicity that you look around to notice that every other diner looks just as comfortably, effortlessly chic as you. It's a myriad of high-quality Henleys in the sheerest of jerseys, skirts with the perfect amount of drape, and rainbows of tank tops in every color you could ever dream of. No, little deep-v Dorothy, this isn't Oz; it's American Apparel - and it's planning to take over Minneapolis, one track jacket at a time.
The mythical status of American Apparel is quickly approaching legend. Though it was only gifted to us in 1997 by CEO Dov Charney (more on him later), the brand has skyrocketed to success; they've opened hundreds of new stores all over the world in this past year alone. American Apparel Jerusalem? Sure. American Apparel Hong Kong? It'll happen. And all this fuss for a bunch of T-shirts? Absolutely.
Customers wouldn't have it any other way. "The pieces are so simple but can be worn in countless ways. I love that I can buy a blue v-neck tee and wear it with jeans or a high-waisted skirt. It's essential for everyone's wardrobe," says senior Lindsay Johnson, spotted wearing American Apparel's ultra-popular tri-blend fabric T-shirt.
"It's somewhere you can buy a dress with a silhouette," adds Uptown store shopper Carly Scheer. Clearly they're doing something right.
Besides the fabulousness of the fashion, American Apparel has an admirable reputation. The clothes are made domestically; everything comes to you direct from Los Angeles. There's no trace of anything from Malaysia, China or Pakistan; it's 100 percent "sweatshop free."
American Apparel has also gained quite a reputation for its excellent treatment of its employees. They boast of creating more than 5,000 jobs and their employees glow with appreciation. "They treat us so well, and working here I'm getting more pay than I've had anywhere else in retail; my benefits, breaks and discount are all so great," says Uptown American Apparel staff member Vienna Wilson.
And it's finally trickled down to Minneapolis. The Uptown store opened Friday, Sept. 21 and business has been "fantastic," according to store manager Aaron Murphy.
"I was surprised it hadn't come to Minneapolis sooner; it's the greatest location for the store besides Chicago and Los Angeles," he said.
Obviously its Uptown locale (it's housed in the old American Eagle building) is perfect for the store's target clientele: young, fashionable people. "I hope we'll bring some re-growth and revival to the Uptown area; it's gone downhill lately because so many businesses are closing," Murphy said. (Need we remind you that American Eagle itself only lasted several months in its Uptown location?) Murphy has a point: Uptown these days is much less brilliantly lit and full of life than in its past incarnations.
But what can save it? Rumors of an H&M moving into that ghost town of a Gap building float all over Minneapolis, and maybe the combination of American Apparel and H&M, fashion-forward retailers renowned for their great garments with even greater prices, will breathe some new life into everyone's (including Prince) favorite too-cool-for-you hangout. After all, what is our beloved Calhoun Square without a herd of hipsters?
Speaking of those cardigan-wearing, thrift-store-haunting kids rocking Animal Collective in their earbuds, what is it that makes American Apparel such a hipster hotspot? Is it the ultra-short hot pants one can rock with an itsy-bitsy vest and '70s throwback gym socks? The wear-with-anything leggings that even come in blindingly shiny silver? Is it the skintight, figure-clinging dresses that still manage to flatter and draw catcalls? Or perhaps it's the unisex appeal of nearly every garment? Maybe it's the indie-kid staple scarves that can be worn in over 50 ways? In its very simplicity, American Apparel's designs encourage your creativity; have fun, accessorize, don't take fashion too seriously! And what's more classically American than a white t-shirt? Dress it up, dress it down, do what you want. We've laid out the basics for you; now make them your own.
The grassroots appeal of the business is also a draw for the young and political; American Apparel's anti-sweatshop aesthetic is refreshing in a world where your Gap sweater was sewn in Indonesia and your Hollister jeans were pieced together in India. The young and hip citizens of the world have their fingers on the cultural pulse, and right now that pulse is beating out: "American Apparel." And although American Apparel's target audience is definitely the youth, there's no reason why your mom can't don some of their more understated garments; just keep her away from the hot pants!
However wonderful, American Apparel raises its share of eyebrows. CEO Dov Charney, a 38-year-old Canadian who began his forays into the great big world of cotton vending as a college student, isn't shy about the use of sex to sell his product. "We like sexy at American Apparel," he has stated.
Charney has also gotten a bit of heat from critics for his antics; when being interviewed for the now-defunct "Jane" magazine (R.I.P!) several years ago, Charney had no qualms about pleasuring himself in front of the reporter. He encourages relationships between co-workers and often dates his employees. His free-love ethic and utter openness about sexuality draw plenty of disapproval, but it has proven to be a business aid. A swirl of controversy only adds to your mystique, after all.
And American Apparel is sexy indeed. Take a peek yourself: Surf around the Web site or check out the displays in-store; the models are almost always in various states of undress, as if the photographer has caught them in the heat of an intimate moment - or in the glow of the aftermath.
The advertisements are striking in their simplicity; the models are often plain and bland-faced, starkly juxtaposed against a plain white backdrop. It's reminiscent of 1970s soft-core pornography. The male models sport barely-there boxer shorts and slight mustaches while the females are untouched by makeup. They are blank canvasses for you to project your own fashion fantasies upon. Often the images are such raw and racy interpretations of the human form that they make you a bit uncomfortable.
But using sex and sensuality to sell style is nothing new. Designers like Calvin Klein, Gucci, Versace and even your friendly neighborhood Abercrombie & Fitch have toed the line between fashion and fornication for years. Sex sells - everyone knows that.
"We're straight out of L.A. We're boisterous. The people expect that from American Apparel," says Murphy. "And people recognize it as a genuine, legitimate company too - good clothes, good prices."
With your curiosity now sparked and visions of pencil skirts and cardigans dancing in your dreams, get yourself to the Uptown location and dive into the wonderful world of American Apparel. All the cool kids are doing it.
incredible Q3 results!
http://biz.yahoo.com/bw/071112/20071112005906.html?.v=1
valuation:
The current analyst consensus is for $345 million in revenue(which we will undoubtedly surpass) and 440 million for '08. At our current price of $13, we are trading at less than 3x trailing sales and only 2x forward sales!
GIL = 5.25x sales
UA = 4.2x sales
CROX = 4.1x sales (even after recent 40%+ decline)
DECK = 4.5x sales
And don't even ask about LULU which is probably the closest comparison!
Our '08 sales will grow at at least 35% but likely more as retail sales become a greater percentage of sales compared to wholesale, margins expand, same store sales grow over 20%, and we open 20-25 new stores. (Retail sales are growing at a rate of more than 50%)
We're expanding faster, have better same store sales, and have a hotter brand than almost anyone in the industry. With store expansion happening all over the world, namely Canada, we can also benefit from the weak dollar. A fair valuation could very likely give us a double from here in a short period of time.
$26/share gives us a mkt cap of $1.77B, still just 4x forward sales.
Does anyone have access to the Lazard report about EDA today? I understand the price target was raised to $20.
Please share!
Chart is looking awesome
Those are are great numbers. Especially in a "recession"
27% ame store sales! that is practically unheard of! that is lululemon territory! i can't wait for the Q3 report. if we get the valuation we deserve this stock will be a 20 in no time.
-- American Apparel announces third quarter 2007 same-store sales growth of 27%
-- American Apparel expects pro forma adjusted EBITDA for the first nine months of 2007 to exceed $40 million, which was its previous guidance for the entire fiscal 2007 year
The store is not in the mall. It is in a shopping center connected to the mall parking lot (Lenox mall, Atlanta). The shopping center is so close to the mall that it is basically a part it.
i don't think they own thier locations but i'm surprised to hear you were at a mall. i was under the impression they didn't have any stores in malls. which location were you at?
Visited store at the local mall on Sunday. Good crowd. Do we know if AA owns or rents their store properties? If so, this could be an asset play. The two stores I have been to are in prime locations.
press release confirming deal should be out any day now, definitely this week. . . . stay tuned
Everyone investing in this company needs to watch this interview. The media, always looking for controversy, will be quick to attack our ceo. But Charney is a visionary and his unorthodox style is a big part of what makes this company great.
http://americanapparel.net/gallery/charlierose/qt.html
American Apparel is going to have a huge edge as other retailers struggle to catch up to the new paradigm in social responsibility.
"Gap plans 'sweatshop free' labels"
Observer story prompts clothing giant's pledge
Dan McDougall
Sunday November 4, 2007
The Observer
In what would be the biggest commitment to ending child labour ever undertaken by a major retailer, Gap Inc is drawing up plans to label its products 'Sweatshop Free'.
The ambitious pledge, which would place the firm at the forefront of the battle to end sweatshops, comes in response to an undercover Observer investigation which last week exposed one of the firm's Indian suppliers employing children as young as 10 to make garments.
Article continues
Yesterday, Gap's senior vice president, Stanley Raggio, flew from San Francisco to New Delhi to meet the anti-sweatshop charity the Global March Against Child Labour, to hammer out proposals to tackle child labour.
According to Bhuwan Ribhu, a lawyer from the charity, the US conglomerate set out a series of ambitious proposals including a move that would see it relabelling its garments to allow the consumer to directly track online exactly where they are made.
The system would closely mirror the highly successful RugMark programme which has largely eradicated child labour in India's carpet industry.
As an organisation operating independently of the carpet industry, RugMark certifies carpets bearing its label are free of illegal child labour. This is accomplished by monitoring looms and factories through surprise and random inspections.
Ribhu said: 'We spoke at length to Gap and they informed us they are looking at a certification system that marks a product with a label "child labour free". This would be a bold step as the firm would leave themselves open to prosecution if children were found making their clothes again. Gap also intimated to me that they are considering using independent monitoring of their suppliers in Asia and this would operate along similar lines to the RugMark programme. The firm is also calling on their competitors to adopt a similarly tough stance.'
He added: 'The Observer's report should act as a wake-up call for the entire industry and the business community at large. The industry should now come together and make a strong commitment against child labour and the trafficking of children for forced labour in their entire chain of supply and sourcing. This should not only be in words but in a clear and concrete plan of action.'
Speaking from San Francisco, Gap spokesman Bill Chandler confirmed yesterday's meeting between senior Gap executives and the Global March Against Child Labour and told The Observer the firm was laying down the groundwork for a major commitment to fight the problem.
'Gap Inc has had many conversations with experts in the field before and obviously since The Observer investigation. We genuinely appreciate that The Observer identified this subcontractor, and we acted swiftly. Under no circumstances is it acceptable for children to produce or work on garments.'
Marka Hansen, president of Gap North America, said the firm's prohibition of child labour was non-negotiable.
good point, also 6 in canada which should be especially good.
http://www.americanapparel.net/storelocations/
There are store locations all over the world. Weak dollar may prove favorable to American Apparel. I know someone whose company does most of his business in Europe. They are raking it in on the Currency conversion. They had so much extra cash on hand they gave shareholders a special dividend.
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