Things are most definitely not going well at American Apparel, a notion rendered bizarrely concrete by a demonstration held last week in which a piñata likeness of CEO Paula Schneider was hacked apart by workers wearing “I <3 Dov” t-shirts outside the company’s headquarters. A video of the demonstration was posted to YouTube by the Workers Together Save American Apparel group, which noted that the piñata was filled with chocolate coins and toy money “to symbolize that Paula continues to enrich herself and her friends with monetary rewards at the expense of shareholders, employees, and anyone with a real stake in the company.” The piñata’s orange Birkin bag was “one of her first purchases after landing the plum job of CEO.” [pm_embed_youtube id='rOWn5UIezMY' type='video']According to the video:
“As of Aug 10, 2015, Paula has yet to fulfill her promise of paying all AA garment workers their annual Christmas bonus from 2014. Workers have also experienced a 50% loss in wages, loss in benefits, continued work furloughs, and have seen their work farmed out to sweatshops outside of AA.”
A significant amount of unrest has plagued the company since Schneider came in to replace Charney, who was officially ousted in December; when I spoke to employees in March, they were already furious about Schneider’s corporate, slightly removed management style, a series of costly and uninspired hires, and most of all, the fact that not one member of the board (hedge fund Standard General replaced 5 of 9 members with their own appointees after Charney’s ouster) had substantial experience with apparel manufacturing.
Since then, American Apparel has undergone mass layoffs and has significantly reduced the hours and personnel at the American Apparel factory, causing many to push back against the company’s continued use of the phrase “sweatshop-free.” The General Brotherhood of Workers of American Apparel formally registered with the U.S. Department of Labor earlier this month, and has officially asked the company for recognition (as of Friday, they’ve received no response).
A potential for bankruptcy looms on the horizon for the embattled retailer, which also faces more than 30 lawsuits from Charney and current/former employees; the company recently reported that it does not currently have enough financing to get through the next 12 months, and that “existing and any new investors could suffer substantial or total losses of their investment in its common stock.”