7.

American Apparel Organic

TM
expects to make profits of $5.6 million in the coming
year. On a preliminary basis, in the year ended December 31, 2012, total net sales
were $60.5 million, a decrease of 6% over the prior year. For the year
ended December 31, 2013, total net sales increased 3% to $633.9 million, with a 3%
increase in comparable sales and a 4% increase in wholesale net sales
1
. For 2014,
American Apparel projects net sales of between $634 million and $658 million. The
low end of that range would represent flat sales, while the top end would lead to a 4%
increase
2
.

First year cash flows are expected to be positive due to strong customer base and
expected feedback from pro-green stockholders. We expect 2014 to be a year where
we return our full focus to exploiting the strength of our brand and delivering
exceptional service to our retail and wholesale customers
2
. Advertising expenses are
expected to be $42,700 a month and once the new project is launched expenses will
consist of supply distribution, marketing and administrative operating costs.


7. Implementation Plan
The American Apparel Organic line will implement existing strategies used with
current products simultaneously incorporating new forms which reach a diverse
group of people who gear towards organic, earth friendly products. Brand
awareness will be strengthened through personalized customer communication and
a strong online presence.

Our aim is to gain 80% of the market with the Organic line plus already existing
products and services through eclectic positioning, strengthened customer relations
and extensive brand awareness.

7.1 Pricing Strategy
Pricing will be based upon a six-month trial basis and also varying amongst different
target segments. The first six months would involve low priced strategies such as
BOGO sales and package deals.

7.2 Sales Strategy
Innovative software such as new POS Software will be used throughout store
with each transaction to fill databases with costumer information to increase
satisfaction amongst most frequent shoppers.
Informal posters/ diagrams will be used througouht stores to bring
awareness to costumers about the benefits of organic clothing while
underling the American Apparel corporate social responsibility mission.

1
Investors.americanapparel.com

2
http://www.asipublications.com/Counselor/News/
7.3 Competitive Edge
Frequent Shopper points once accumulated to a certain will award
customer with discounted pricing.
Plus sized and petite clothing sizes will be offered with onsite altering
assistance.
Increased locations for ease of access for consumers.

7.4 Marketing Strategy
Marketing costs will not exceed 15% of overall revenue
Promotions will involve comparisons of organic clothing versus man
made material while still favoring other American Apparel products.

7.5 Financial Forecast
The financial model below describes first year monthly sales that are expected to be
moderately positive. American Apparel customers through surveys have been found
to be more inclined towards organic, healthier lifestyles and therefore their
responses to the new line will balance out cost with profit. Sales are expected to
peak during maturity (approximately mid-year) while the first few months paves
the way for the first set of interests.









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8. Control Plan

The American Apparel Organic Devision will be held to very high standards and will
continue to uphold the mission of American Apparel throughout the world.


Setting Performance Standards

Pieces which are part of the Organic line that perform 50% less than other
items offered will be eliminated from the line. Customer service expectations
will be exceeded and upheld while communication and connectivity with
consumers both wholesale and retail will be strengthened.

Monthly and Quarterly Checks

As already practiced across the American Apparel organization, monthly and
quarterly checks will be performed to ensure data precision and to asses
productivity and efficiency.

Measuring Consumer Standards

Even though sales might be low in the first few months, consumer awareness
and positive feedback is essential in ensuring strong foundational elements
for the clothing line.

Control Phase Timing

By implementing timelines for expected milestones, the company will be able
to organize strategic measures that may involve increased marketing or
adjustments through financial analysis.