In the past three years, he has opened 140 stores in twelve countries, averaging seven new locations a month. But before his rapid expansion, Charney says his naivete veered him off the success path. “You don’t think about risk,” he says. “The old guys—-they know risk is everywhere. I did things I wouldn’t do now. I would just go in on my intuition, my gut. I’d open stores without air-conditioning or proper permits.”
Today, he can easily afford such amenities and feedback outlets. Charney consults a team of executives he lured from top financial banks and apparel giants, including Fruit of the Loom.
Charney used elbow grease, steady family support and his sexual drive. As a child in Canada, he exploited entrepreneurial avenues, initially, hawking concert t-shirts while his friends were bootlegging shows. Charney refined his import export ambitions through boarding school and a quick stint at Tufts University in Massachusetts.
Charney says American Apparel wasn’t officially born until 1987. With a $10,000 loan from his father, a Harvard-educated urban planner, Charney set up shop at a $1,000-a-month loft with two employees. Two years later, he took his business to South Carolina, which was at the time the east coast hub of manufacturing.
There he sought help from several veterans (or as he affectionately identifies them, “the Eisenhower elders”) of the industry. While he established himself, they taught him the fine details of thread count, cutting and dying fabric. He says he ignored the pitfalls when the market changed, and when his insurance carrier declined to cover one of his biggest customer’s unpaid debts in 1996, he was forced to file Chapter 11.
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