American Apparel Cracks Down On Shoplifting, Loses Hipster Fans

Thieving hipsters, take note.

American Apparel will be tagging every neon legging, velvet bodysuit, V-neck t-shirt and iconic hoodie with an RFID sensor, the RFID Journal reports. The sensors will track items from the time they are shipped from American Apparel’s factory in downtown L.A. to when a customer purchases the item from one of its 280 stores, helping the chain to keep better track of inventory and disappearances.

Since entering the retail market in 2003, American Apparel has succeeded wildly by imparting its cotton basics with alternative appeal. The company supports progressive issues like gay rights, pays factory workers $12 to $14 per hour -- far above minimum wage -- and regularly incites the uptight with skin-filled ads.

Yet American Apparel has long been targeted by shoplifters, many of them indistinguishable from the chain's loyal customers. The company's stores initially lacked anti-theft sensors, inciting a series of plunders whose history is documented on various Facebook groups and blogs. Former employees allege that in its early years, American Apparel had a pro-shoplifting policy, explicitly asking managers to turn a blind eye so that the right type of person would have easier access to the clothes and become an unwitting spokesperson for the brand.

Whether or not these claims prove true, the fact that the company has made its money by catering to rebellious, anti-corporate youth has infuriated more than a few members of its target market. Arguably, shoplifting from the store was a way for some to subvert the commercialization of counter-culture. Free clothes were, naturally, a perk.

"This is a true story about stealing from a corporation," Tao Lin wrote in the Vice Magazine story that inspired his 2009 novella, Shoplifting from American Apparel. "American Apparel is a corporation. ... Don’t hate me for stealing from an independent clothing company, because then you'd be basing your hatred on something that isn’t real."

Of course, irony-tinged theft is a bad thing for any company, "independent" or otherwise. As American Apparel expanded, opening 133 stores between 2007 and today, it equipped its locations with EAS (Electronic Article Surveillence) devices, or those hard plastic sensors that get removed at cash registers. In 2007, it launched a pilot program that tested the more sophisticated RFID (Radio Frequency Identification) tags, which track the movement of each item and help prevent merchandise from getting stolen internally, by employees.

In stores with both kinds of sensors, "shrinkage," or the number of items that mysteriously disappear between a factory and a store, has dropped as much as 75 percent, Stacey Shulman, American Apparel's VP of technology told the RFID Journal in April 2011.

Once it finishes installing the devices in every store, American Apparel -- now the largest clothing manufacturer in America -- will also have the second largest network of RFID sensors of any retailer, after Walmart. Other retailers are running trials of RFID, though the technology has yet to become an industry standard.

Still, theft is but one item on a long list of business problems for American Apparel. The company teetered on the edge of bankruptcy for much of last year, due to declining sales and falling stock. It is in the process of resolving a lawsuit from a former employee that accuses CEO Dov Charney of sexual harassment.

With demand for American Apparel's clothing so low, it's hard not to wonder whether the company longs for the days when attractive thieves flocked to its locations. Whether American Apparel manages to pull itself up will be an interesting test of how long a corporation can continue to sell "cool," when one of the only constants in its shoppers' idea of "cool" is anti-corporate sentiment.

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