Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerRecently gone-public clothing sensation American Apparel (AMEX: APP) has a new marketing campaign, and it isn't just about selling clothes.
According to the New York Times, "In a new series of ads, American Apparel is moving in a political direction. The cause is immigration reform, and the ads say in part that the status quo "amounts to an apartheid system" and should be overhauled to create a legal path for undocumented workers to gain citizenship in the United States."
American Apparel CEO Dov Charney has never shied away from controversy. In a recent post on BloggingStocks, I discussed some of the more bizarre antics of his career and it isn't just erotic advertising. This is a guy who actually masturbated in front of a reporter during an interview with Jane magazine.
It isn't that I doubt the sincerity of Mr. Charney's beliefs about immigration. As he said, "These people don't have freedom of mobility, they're living in the shadows. This is at the core of my company, at the core of my soul."
The problem is that, now that American Apparel is public, it isn't just Mr. Charney's company. Now he has a fiduciary responsibility to shareholders, and putting his company at the center of divisive issues may not be in their best interests. When a company is private, it gets to make decisions about what's important, and certainly has a right to use its own resources to take a stand for causes that are important to the owner. But as a public company, American Apparel has a responsibility to focus its resources on increasing its profits.
As intriguing as the company's growth is, I do question whether Mr. Charney is well-suited to run a public company. He's a brilliant maverick and an ingenious entrepreneur, but dancing to his own drum may alienate Main Street ... and Wall Street.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
2-03-2008 @ 4:17PM
SeanPatrick said...
Civil Society Helps (civilsocietyhelps.org) helps perpetuate fraud against U.S. citizens. The courts in Minnesota are ill equipped and uninformed about the immigration fraud these kinds of groups promote. See http://www.marthasullivanlaw.com
With false accusations from an immigrant residency seeker and the help of VAWA laws, a stable American citizen can be reduced to living in poverty. All of your assets can be seized and given to the immigrant residency seeker even if you are not found guilty. You will immediately be forced to surrender a portion of your income to the immigrant residency seeker. The courts will order you to turn your motor vehicle over to the immigrant residency seeker even if the car is in your name and the residency seeker does not have a drivers license. Your illegal immigrant spouse becomes legal and you become illegal. The court system will abuse you and strip you of your rights while social programs that promote immigration fraud thrive.
4-01-2008 @ 10:37AM
bsharkey1 said...
what an idiot... I will not now or ever buy their overpriced crud.
they should rename the place Mexican Apparel.
1-19-2008 @ 2:05AM
DavidJ said...
I AM a stockholder and I love it. Dov Charney and his "program" is exactly why I am. He inspires his (our) target customers. It is not what I or the other stockholders think that will make AA a success...it will be our customers who are ringing the cash registers! (Follow the money!) So far they support the products and the edgy "program". Keep it fresh, and keep it up!
1-21-2008 @ 9:17AM
Ed Weirdness said...
I am allways amazed at the arrogance of Corporate bigwigs who feel it incumbent to "socially engineer" the consumer. As a private Citizen Mr. Charney and his supporters have a right to their views. American Apparel is off my list of must buy stocks. Focus on products and performance Mr. CEO, contribute your personal wealth, time and energy to your projects and agenda, and resist the urge to turn share holders good will into a political tool. Once word of this reaches consumers, investors may not be so stoic in there support for mixing business and agenda.
1-18-2008 @ 8:13PM
zeezil said...
Companies rely on illegal immigrants to do jobs they aren’t willing to pay much for. In 1980 a meat-packing job paid 19 dollars an hour but today that same job pays closer to 9 dollars an hour, according to the Labor Department. Illegal aliens depress wages for U.S. workers by as much as $200 billion a year, in addition to placing a tremendous burden on hospitals, schools and other social services.
1-19-2008 @ 12:28AM
Ricardo Castro said...
CEO's and public companies have been taking politicial stances for years except that most of these have been on the right of the political spectrum. Recall the op-ed pieces of the former Mobil company in the New York Times. I don't see any conflict with American Apparel taking a stand on the left. It is this kind of creativity that animates cutting edge companies. See "The Creative Class and the Value of Tolerance and Diversity" at http://eristic-ragemail.blogspot.com/
1-18-2008 @ 9:06PM
graciela Si said...
Homeland security and ICE need to raid American Apparel and hold Mr.Charney and his stockbrokers accountable for knowingly hiring criminals and breaking American laws. People that steal American citizens social security card numbers, as well as breaking into our country and abusing our welfare system, are indeed criminals. Any American citizen would be arrested for these acts.
1-21-2008 @ 1:22PM
Brian said...
Hey Zac--
I don’t know if you've been under a rock for the past five years, but have you ever heard of "Sweatshop Free"? That was one of the first marketing angles of American Apparel years ago that helped them stand out from the crowd. If the company had not staked out such a unique, interesting position, it's unlikely they could have branched out into retail as successfully as they did. There was also a thing they stood behind called "Legalize LA." This goes years back. Google it and maybe do some research about the company and the CEO before blogging about them like a newbie. It's an election year, and this looks to be a big issue in this campaign, so I'm not surprised that they're articulating their position again at this time. There are plenty of plain vanilla clothing brands out there, and plenty of plain vanilla chief executives, but they're not as interesting to write about, are they? That's precisely why American Apparel has such a compelling, authentic brand and why smart shareholders would be inclined to support this kind of advertising.