American Apparel To Expand 'Cautiously'

LOS ANGELES-American Apparel, for now, will expand cautiously, but the pace could pick up as the economy improves, executives said at the company’s third-quarter conference call.

After opening more than 80 stores last year, the company cut back openings to less than 30 in 2009. But that could change in the future, said Dov Charney, chairman and CEO

“We are very cautious right now about opening new stores, but in time, that caution may subside,” Charney said. Thus far in 2009, the company opened 23 new stores while closing five. Four signed leases are in the pipeline, with three likely to open before year-end.

“We believe we are ending a period of severe cannibalization caused by opening more than 80 stores in 2008,” said Adrian Kowalewski, CFO. “We are evaluating a large number of locations for future openings.”

In the last quarter, the company opened its first store in Ireland, Dublin to be specific, and a unit in Tokyo, as well as stores in the Untied States and Canada. American Apparel operates 275 retail stores in 20 countries.

Net sales for the quarter were $150.3 million, down 2.9% from the third quarter of 2008. Comparable-store sales dropped 16% on a constant currency basis. Net income was $4.2 million, compared to $2.3 million in the year-ago quarter.

Image from Flickr user dovcharney.