American Apparel in More Financial Straits

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American Apparel is like the cool kid in high school who's been cruising by on good looks and popularity. Except now, grades are due and the once untroubled hipster's about to flunk out. Today WWD reports that while most retailers are preparing to announce their second-quarter results this week, American Apparel has notified the SEC that its report for the period between April and June will be late—and unprofitable. This doesn't bode well for the company, which hasn't even filed its first-quarter report yet.

Without a doubt, 2010 has not been a favorable year for the chic basics retailer. The company has not only seen its profits drop and stock market shares take a tumble, but the onslaught of bad press surrounding its appearance-based hiring methods, CEO Dov Charney's unconventional head-honcho shenanigans (along with the various sexual harrassment complaints filed against him), and perhaps the public's tiring of its controversial, verging-on-porn ads, has amounted to one huge mess.

And it looks like things are only going to get worse. Between various accounting firms trying to make sense of the company's numbers, the eventual announcement of what the second-quarter losses actually are, rising production costs and the threat of getting delisted by the stock market, you can't help but wonder if American Apparel did this to itself. The company thumbed its nose at traditional business methods, focusing more of its energies on building up a brand image based on carefree subversiveness and utter insouciance (and for a while, we loved them for it). Math homework? Accounting? Does it matter when you're this cool, is the ironically-rhetorical question we can envision the poster girls smugly asking. Apparently so. American Apparel may just be too cool for school—and it's own good.

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