In the past year Amazon has launched a range of projects from voice-recognising devices to shops without cash registers.

Why it makes sense for Amazon to buy American Apparel

postato da teganlucas il 06/01/2017
Categoria: Intrattenimento - tags: dresses + fashion

In the past year Amazon has launched a range of projects from voice-recognising devices to shops without cash registers.

However, the online giant’s rumoured interest in buying preppy fashion brand American Apparel out of bankruptcy could be a bold move to boost the company politically, while staying true to its reputation of disrupting the retail landscape.

American Apparel tumbled into bankruptcy for the second time in November due to its unsustainable debt pile. The fashion brand first filed for bankruptcy in October 2015 amid a protracted legal battle with ousted founder Dov Charney.

The retailer shut all 12 of its UK stores in December, resulting in 150 job losses, after the US parent stopped shipments to stores.

Now Amazon is reportedly vying with US fashion brands Forever 21, Next Level Apparel, Authentic Brands Group and Canadian clothing maker Gildan ahead of a bid deadline on Friday, but the online giant has deeper pockets than all of them put together.

While American Apparel as a brand has fallen from its heyday - when its ‘Sweatshop Free’, colourful basic clothing was promoted with soft-pornographic style campaigns - Amazon could still make the most of its ‘Made in USA’ stitching to soothe political tensions.

Make America Great Again

Last month Jeff Bezos, Amazon's wealthy founder, took part in a gathering of tech titans with president elect Donald Trump and referred to it as “very productive”. Just days before Trump had launched an unprompted Twitter attack on Amazon claiming: “If @Amazon ever had to pay fair taxes, its stock would crash and it would crumble like a paper bag.”

If Amazon bought all of American Apparel, the online giant would be rescuing the 3,500 US workers employed at the fashion company’s manufacturing plants in Los Angeles. American Apparel is one of the biggest garment makers in the United States and saving it would be a way of protecting US jobs, one of Trump’s key election pledges.

“It’s pretty clear that Amazon was in Donald Trump’s crosshairs,” says Adam Cochrane, analyst at UBS. “Buying American Apparel, with its ‘ Made in America’ slogan would cost Amazon relatively little to placate the future President.”

A boost to its fashion credentials

Amazon has come a long way since being a rival to the booksellers. But selling clothes and shoes is a different ball game. It relies on luring shoppers to buy emotionally and often on impulse and there are already online fashion companies that do this very well.

“Asos has grown phenomenally through having its own brand and own platform that tracks the customer journey," says Dominique Bonnafou, senior strategist at Fitch.

The US online giant has already put the $3 trillion global fashion market in its sights and analysts have predicted that the high-margin business could give a much-needed boost to Amazon’s profitability.

It has already heavily invested in a trendy photography studio in Shoreditch, east London, after realising that shoppers demanded more views of a short prom dresses uk before buying it than of a book, for example. Amazon also enlisted model-of-the-moment Suki Waterhouse as the face of its fashion relaunch to lure the millennial crowd away from fast-fashion rivals Boohoo.com and Missguided.

Amazon, which bought shoe retailer Zappos in 2010 and fashion site Shopbop in 2006, has already attempted to launch its own clothing brands, such as Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro, and Society New York - with mixed success and little fanfare.

“Buying American Apparel would give it a big step up from having to create a brand from fresh,” Bonnafou adds.

A shop window to the world

American Apparel has 110 stores across the US in hipster neighbourhoods and shopping malls. Having that footprint instantly would be a major jump from the half a dozen bricks-and-mortar book shops and trial grocery stores that Amazon currently operates in the US. But it wouldn’t need to keep the shops just for fashion.

“Amazon sells everything, so there is no reason why they wouldn’t be able to showcase in shops different products together to sell a whole lifestyle to a consumer,” says Bonnafou.

As a result, Amazon could find more benefits than just fashion to the deal.

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