Executive Careers

Published: Tuesday, 29 Sep 2009 | 11:40 AM ET

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Photo Source: dovcharney.com

No, this isn’t another superlative-laden faux-business piece re-affirming Dov Charney’s status as Hipster Magnate Ad Infinitum.

That’s been done. And done, and done. 

But I do plan to extol the successes of the polarizing American Apparel founder and his monochromatic empire—not for his V-necked influence on the Grizzly Bear crowd, but for his ability to craft a business that uses risk to its advantage as well as any in recent memory.

In building a clothing company remarkable for running risqué billboard spots, trumpeting Made-in-the-U.S.A. vertical integration, and eschewing the use of logos, Charney cast himself as head maverick—the hyperactive face of the operation. As American Apparel blossomed into a 260-store international megachain, Charney did not distance himself from any facet of the business; he still shoots many of the sexually-charged ads himself—a fact that has bolstered critics who say he exploits impressionable young women (Charney infamously the target of a slew of sexual harassment suits). Meanwhile, Charney hitched the brand to equally incendiary politically progressive slogans, advocating gay marriage legalization and immigration reform—the latter in 10-foot boldface on the side of his downtown Los Angeles factory.

Business executives generally see such outspoken political advocacy as toxic.

During his playing days, Michael Jordan—a man whose zeal for promotion rivals that of Charney—famously refused to endorse an African-American Democrat trying to unseat legendary civil rights opponent Jesse Helms in Jordan’s adopted home state of North Carolina, reportedly telling a friend that “Republicans buy shoes, too.” For all the criticism he’s since endured for failing to convert his lofty platform into political soapbox, Jordan’s fear of lost profit was not without reason—company high-ups who publicly air their political leanings risk inciting customer backlash. Just last month, Whole Foods

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[WFMI  Loading...      ()   ] CEO John Mackey’s Wall Street Journal editorial against “ObamaCare” inspired the upscale grocery’s left-leaning customers to revolt en masse; a Boycott Whole Foods Facebook page registered more than 14,000 members in a week’s time.

Herein lies the day’s lesson in risk calculation: Mackey’s message was bound to offend Whole Foods’ core demographic, a likelihood Mackey must have anticipated to some extent. While Mackey did use the space to promote healthy foods, the fact that he’s known as a staunch free-market libertarian, coupled with the widely-accepted stereotype of the affluent, liberal Whole Foods devotee, suggests he didn’t pen the piece with bottom line in mind. Whatever his aim, Mackey clearly underestimated how deeply Obama’s health care vision resonated with many of his customers. (By contrast, Safeway CEO Steve Burd had been broadcasting nearly identical views for months by the time Mackey’s missive ran; the near-total absence of protest indicates Burd accurately pegged Safeway shoppers as a politically apathetic lot.)

American Apparel’s

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[APP  Loading...      ()   ] Charney, on the other hand, claims to suffer from no such idealism, despite what the clothier’s incisive messaging might lead one to believe: In clarifying his motivation for providing workers with industry-leading wages and benefits, Charney told The Economist in 2007 that "American Apparel is not an altruistic company. I believe in capitalism and self-interest. Self-interest can involve being generous with others." Rather, Charney knows his audience—young, educated city dwellers with a mild anti-establishment bent—and he knows what they value. Despite lingering protestation over alleged anti-union tactics, American Apparel has established itself in the fashion industry as a trendsetter in both design and so-called ‘social responsibility.’ So long as the retailer maintains its prescient reputation in both regards, American Apparel customers will continue to overlook such details as the company’s recent dismissal of 1,000-plus unauthorized workers, its $5 million settlement with Woody Allen  last spring, and Charney’s aforementioned ability to attract a harassment case every time he trots out a new facial hairstyle.

The applicable question, then, is are you in a position to follow suit? If you’re confident that you know your customers, you might find it to your company’s advantage to champion a cause they’re inclined to support (and no, being “pro-recycling” no longer qualifies as a bold endeavor). As American Apparel’s success shows, establishing a deeper rapport with your target demographic—building consumer street cred, so to speak—could prove vital to your ability to lock in loyal customers for years to come.

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Ben Fuchs is a staff writer at Vault.com. Prior to moving to New York, he worked as deputy press secretary to a California assemblyman and as a reporter for The San Diego Union-Tribune and The (Eugene, Ore.) Register-Guard. He has a BA from the University of Oregon’s School of Journalism and Communication.

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