American Apparel Reports 2013 Sales
Sales Increased To $634 Million
Despite a weaker Q4, Counselor Top 40 supplier American Apparel (asi/35297) has announced its total 2013 sales increased to $634 million, a year-over-year rise of 3%. Wholesale revenues – which include sales to the advertising specialty industry – rose 4% to $180.7 million, while comparable store sales improved by 3%. Still, the firm’s 2013 financial results were mixed as adjusted EBITDA fell from $36.6 million in 2012 to between $7 million and $9 million last year.
“The challenged implementation of our new distribution center had a material negative impact on the company in terms of actual costs,” said CEO Dov Charney. “Naturally, the disrupted flow of merchandise to our stores, wholesale clients, and online customers had an immediate negative impact on sales. These disruptions impaired our ability to react to demand trends and properly plan production flows and resulted in production cost overruns and excessive overtime charges.”
American Apparel’s much-publicized retail sales have been greatly impacted of late, declining each month since December. Retail store sales dropped 7% in February, offsetting slight gains in online revenues. “The company believes that the February sales results were significantly impacted by the extraordinarily severe winter weather in regions where we have a concentration of stores,” according to an American Apparel statement.
Wholesale revenues have fared much better, jumping 9% last month after a 7% increase in January. “We are energized more than ever,” said Pat Honda, director of wholesale imprintable sales at American Apparel. “There will be no bumps in the road this year with our ability and commitment to be one of the most innovative ASI suppliers in the world.”
For 2014, American Apparel projects net sales of between $634 million and $658 million. The low end of that range would represent flat sales, while the top end would lead to a 4% increase.
“We invested substantially in our infrastructure in 2012 and 2013 and almost all of these projects have been implemented,” said Charney. “We expect 2014 to be a year where we return our full focus to exploiting the strength of our brand and delivering exceptional service to our retail and wholesale customers.”
Despite such optimism, American Apparel made headlines last month when several media outlets reported the company had contacted restructuring advisers amid a battle with weak sales and a heavy debt load. In an interview with Counselor, Charney dubbed the reports a “mischaracterization” and said American Apparel expects a “record year.” With North American ad specialty sales of $96.8 million in 2012, American Apparel ranks 14th on Counselor’s list of the largest suppliers in the industry.