Two years later, he emerged from the ashes in California, meeting Persian and Korean manufacturers, who were making t-shirts for double his manufacturing costs in South Carolina.
“I felt like Marco Polo,” says Charney. “I brought these people information they never had.”
In 1998, he opened his first wholesale factories with Sam Lim, in Santa Fe and on the “10” Freeway in south Los Angeles. Inspired by a European shirt he saw on an ex-Argentinean girlfriend, Charney worked with Lim on implementing the use of lightweight curve-hugging fabrics.
Charney saved money by hiring models from local strip bars, which caught backlash from both the religious right and feminist left. He furthered his cultural detours by enlisting rock bands to emblaze their logos across his designs.
By 2003, when he opened his first retail store, his merchandise already had a following.
In his factory, he employs over 4,500 people, mostly Hispanic. They receive full benefits and earn between $8 and $18 an hour, the highest labor wages in the industry.
“It is just good business,” says Charney, who regularly speaks out against sweatshops. “I want to make a product that improves peoples’ lives—not just those who buy it, but also for those who work for me.”
By running his entire operation out of L.A., he says he can maintain tight control on the quality and distribution, as well as his buxom ad campaigns. Charney says this produces low employee turnover and immunity from union chiefs.
To stay on top, Charney refuses to tone down American Apparel’s image. He has his eye on new locations and aims to compete in the footwear and denim markets. Also a proponent of free trade, Charney sees the industry's future in the Internet. “We’re in the middle of a tectonic shift; we’re only about 40 percent there,” he says.
As for the other guys in the business and the new ones coming in, he says he’s not rattled. “Yeah, there are others that do what we do. I’m not worried. I salute everyone in this business.”
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