Payoffs not layoffs promised to Apparel staff

LOS ANGELES – The mostly foreign-born workers at American Apparel’s downtown garment factory, the largest in the US, have enjoyed benefits that would make austere executives grab their wallets: A health plan.

Free English classes. Back rubs from a masseuse and stretching breaks.But with Tuesday’s announced sale of the T-shirt maker to a publicly traded company came news not of slashes to staff and perks, but of yet another novel benefit: A piece of the company would be offered to American Apparel’s some 5 000 employees.Endeavor Acquisition Corp., which said it had reached a $244 million deal to acquire privately held American Apparel Inc.and trade it on the stock market, plans to reserve about 2.7 million shares of their stock for employees, according to a company press release.The company also plans to distribute $2.5 million in bonuses.It is an unusual step in an industry that has historically squeezed an expendable and constant supply of immigrants and offered little in return.But American Apparel is an unusual company, founded by the unusual Dov Charney, 38, whose mission has been to keep the single largest garment factory in the US “sweatshop free.”The company has expanded to 143 stores in 11 countries.”This is an exciting time for American Apparel,” Charney said in a statement.”Acquiring the necessary financial foundation will give us the opportunity to realise our bigger dreams.”Under the terms of the deal, Endeavor will pay Charney 32.3 million shares of restricted Endeavor stock.Endeavor will assume $110 million in American Apparel debt.Charney will remain in charge of the clothing chain, which is as much known for its bright coloured clothes as its racy advertising campaigns and socially conscious treatment of garment workers.His persona as an advocate for workers’ rights has at times been challenged by store employees who accused him of sexual harassment.Charney has denied any wrongdoing.Jennifer Black, an independent equity analyst covering speciality retail and apparel, said she does not think shareholders will demand Charney scale back on worker benefits and salaries.Discouraging staff turnover saves money, and the company stays attractive to social-minded shoppers, she said.”Every company has their niche.If they can prove to the world that what they’re doing really does create goodwill, that turns into bottom-line dollars,” Black said.A half-dozen workers on lunch break outside the massive pink factory, with a sign reading “American Apparel is an Industrial Revolution,” said Tuesday they did not know about the sale or the stock offer.They said, however, their jobs are better than any others they have held and did not expect things to change under new ownership.”The benefits, the pay, the work environment, it’s all very good,” said Gustavo Rivera, 21, a Mexican immigrant who earns $15 an hour sewing labels onto T-shirts.Nampa-APBack rubs from a masseuse and stretching breaks.But with Tuesday’s announced sale of the T-shirt maker to a publicly traded company came news not of slashes to staff and perks, but of yet another novel benefit: A piece of the company would be offered to American Apparel’s some 5 000 employees.Endeavor Acquisition Corp., which said it had reached a $244 million deal to acquire privately held American Apparel Inc.and trade it on the stock market, plans to reserve about 2.7 million shares of their stock for employees, according to a company press release.The company also plans to distribute $2.5 million in bonuses.It is an unusual step in an industry that has historically squeezed an expendable and constant supply of immigrants and offered little in return.But American Apparel is an unusual company, founded by the unusual Dov Charney, 38, whose mission has been to keep the single largest garment factory in the US “sweatshop free.”The company has expanded to 143 stores in 11 countries.”This is an exciting time for American Apparel,” Charney said in a statement.”Acquiring the necessary financial foundation will give us the opportunity to realise our bigger dreams.”Under the terms of the deal, Endeavor will pay Charney 32.3 million shares of restricted Endeavor stock.Endeavor will assume $110 million in American Apparel debt.Charney will remain in charge of the clothing chain, which is as much known for its bright coloured clothes as its racy advertising campaigns and socially conscious treatment of garment workers.His persona as an advocate for workers’ rights has at times been challenged by store employees who accused him of sexual harassment.Charney has denied any wrongdoing.Jennifer Black, an independent equity analyst covering speciality retail and apparel, said she does not think shareholders will demand Charney scale back on worker benefits and salaries.Discouraging staff turnover saves money, and the company stays attractive to social-minded shoppers, she said.”Every company has their niche.If they can prove to the world that what they’re doing really does create goodwill, that turns into bottom-line dollars,” Black said.A half-dozen workers on lunch break outside the massive pink factory, with a sign reading “American Apparel is an Industrial Revolution,” said Tuesday they did not know about the sale or the stock offer.They said, however, their jobs are better than any others they have held and did not expect things to change under new ownership.”The benefits, the pay, the work environment, it’s all very good,” said Gustavo Rivera, 21, a Mexican immigrant who earns $15 an hour sewing labels onto T-shirts.Nampa-AP