May 18 was a long day for retailer American Apparel. The Los Angeles-based company hit international print and web headlines on Sunday, as reporters and pundits anticipated the opening round of Woody Allen’s lawsuit set to begin Monday. Allen’s suit alleged that American Apparel used his image in a controversial billboard ad without his consent and that the poster, which showed his character from Annie Hall dressed as a Hasidic Jew with Yiddish text that translates as “the holy rebbe,” damaged his reputation. Though the dispute had dragged on for nearly a year, lawyers for the two sides reached an eleventh hour settlement yesterday before the Manhattan federal court heard the case. Allen agreed to a $5 million settlement, half the amount he was seeking in his suit.
Before the end of day, the company was back in the news with its first quarter 2009 financial results. The consensus in most financial circles was they could have been a lot worse. The 7 percent decline in same store sales matched up favorably against the performance of competitors such as Urban Outfitters, with a 10 percent drop in year-over-year sales from first quarter 2008 and a typical decline in the 20-percent range for companies such as Aeropostale and Abercrombie&Fitch. The good news was a 2.4% increase in sales from first quarter last year to this year and a jump in gross margins from 55.3 percent in the opening of 2008 to 57.2 percent for the same period this year.
For some thoughts on the lingering aftermath, go to https://vmsd.com/content/the-bully-pulpit and check out how Kristin Godsey, VMSD’s associate publisher/executive editor, views it.