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Is Paula Schneider’s Turnaround Plan Taking Hold at American Apparel?

Current chief executive Paula Schneider has been trying to right the ship since January 2015—no simple feat considering the dire straits the Los Angeles-based company has been in for years—and according to retail technology firm Edited, she’s been “chalking up wins.”

Katie Smith, senior fashion and retail analyst, pointed out that American Apparel has introduced only 17 new styles online so far this August and today has about 3,500 products in stock—that’s a quarter of the nearly 14,000 it had two years ago.

“Frankly, American Apparel was dramatically over-inventoried,” Smith said.

A smaller assortment, combined with better product shots, means the website is easier to shop. For instance, the product page for a poplin oversized shirt in white for women features a manageable five photos to click through (and one more for the pink colorway) of a model standing in front of a white seamless background, a short description, size and color options as well as the model’s height and what size she’s wearing.

“Formerly, every product had multiple images. Some were shot in house style, others seemingly featured staff, others still seemed to have been submitted by consumers—it was hard to tell,” Smith said.

In addition, the once-skeevy marketing campaigns have shifted into more tasteful territory. Using an email newsletter for tennis skirts as an example, Smith noted that last year’s photo starred seemingly school-aged girls wearing the skirts hiked high, while a campaign for the same skirt this year showed only the garment.

The price point has changed, too.

“American Apparel says it has always gone after three consumer groups. The high school student who accesses the opening price points. The ‘party girl’—this probably means the shiny spandex shopper. And lastly, the ‘classic girl’ who is 25 to 35 and doesn’t want super-short cuts anymore. It’s this market that might be a smarter space to retail quality basics to,” Smith said.

Nearly half of Uniqlo’s offering ranges in price from $10 to $20, while roughly two-thirds of H&M’s range is priced under $20. By comparison, more than half (52.7%) of American Apparel’s products are between $10 and $30.

“That’s a higher weighting than other retailers give this price point. H&M, Uniqlo and Urban Outfitters put their emphasis beneath $20 and Gap evenly gives attention to $10 to $20 and $20 to $30. American Apparel sits somewhere between Gap and Everlane,” Smith said, but cautioned, “They’ll need a continued focus on quality if they want to maintain this positioning.”

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