In an interview with VICE media last year after the Rana Plaza tragedy, Charney tore into fast fashion as being made “on the backs of other people,” “basically stolen goods” that are “made in a slave-like setting.” He ranted about an H&M ad he’d seen selling $4.99 bikinis: “$4.99 doesn’t exist unless you’re screwing someone,” and challenged consumers to be as wary as if someone said, “Hey, we’ve got a hamburger for 10 cents?! It costs money to make things.”
H&M has actually been one of the few other companies to stand up in support of a living wage and commit to longer-term contracts with suppliers, but Charney’s point about the hidden costs of fast fashion is a valuable one.
Not that American Apparel’s factories have been problem-free: In 2009, 1,800 of its employees in downtown Los Angeles were fired for irregularities in their immigration documents. But the labor abuses rampant in factories around the world—unpaid wages and overtime, child and forced labor, lack of functioning safety equipment, physical abuse—do not appear to have had a home at American Apparel. (Although I suspect no auditor would give a factory a passing grade if the owner was walking the floor in his underwear, as Charney is known to have done.)
The loss of those 1,800 employees caused production delays and cost overruns as the company had to replace them—one of the first clear signs of the company’s financial downturn. But American Apparel’s economic woes don’t seem to be linked to its commitment to higher wages, but rather to lenders skittish about Charney’s temperament and poor financial skills.
In the VICE interview, Charney specifically called out the problem of brands’ reliance on short-term contracts, which sticks the factories with the goods if they miss a deadline and provides no support for equipment and infrastructure upgrades: “All the contracts are short-term—that’s one of the things that keeps sweatshops sweatshops,” Charney said. The morning of the Rana Plaza building collapse, workers had resisted going in because they knew it was unsafe; Charney asserted, “You can be sure they were hustling everybody back into the building because of deadlines.”
Charney called on brands to insert clauses in their purchase orders that if a supplier can’t meet a deadline due to what he called “human hardship,” they'll assess the situation and see about getting them an extension.
That idea comports with recommendations from NYU’s Center for Business and Human Rights, which recently published a report on supply chains and sourcing after Rana Plaza. The report advocates for companies to move toward a more transparent and direct sourcing model: “When problems arise—production delays, cost overruns, social or environmental non-compliance—the buyer and the supplier communicate transparently about the problem and take steps to remediate the root cause of the problem, including adjusting sourcing practices by the buyer.”