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Will Anyone Care About American Apparel Ads If They Don't Include Nudity?

American Apparel (APP) is flirting with a new ad direction -- featuring models who are fully clothed instead of naked -- but that initiative may be on a collision course with its financial issues. The company confessed today that it cannot file its Q1 or Q2 2010 earnings reports by the Aug. 16 deadline it had previously given. The company did not give a date before which it would file those numbers, leaving some to speculate that perhaps some kind of wrongdoing has emerged inside the company.

CEO Dov Charney discussed the company's new style direction with Bloomberg:

"Hipster is over," says Dov Charney, who, as the founder and chief executive officer of American Apparel Inc., rode the trend as far as anyone.
... "Kids are moving away from piercings," Charney says. "We want to grow old with our customer. We want to be a traditional American clothier."
To wit, the company that turned modern fashion advertising on its head by showing ordinary girls with their clothes off instead of glamorous models with their clothes on has started promoting a preppy line of nonsexual attire (pants, shirts, jackets) in lieu of the usual wares that adorned its ads (underwear, leggings, more underwear).

You can see some of its men's styles advertised here and here; and women's pleated pants -- incredibly modest, by AA's usual standards -- advertised here and here.

On paper, Charney's logic is sound. His company has dismal margins. Pants and jackets are more expensive, and more profitable, than T-shirts and underwear.

But pants and jackets are a style and advertising U-turn for a company whose brand image is heavily invested in revealing, sexy clothing promoted with the suggestion that you ought to be taking them off as soon as you get home. Preppy, fully clothed styles rob AA of its advertising raison d'etre, and they do so at a time when AA's ad budget is in freefall as the company desperately tries to save money. Will anyone be interested in AA if its ads don't feature nudity?

Lawyers are already trawling for shareholders -- who've seen their stakes decimated by Charney's mismanagement -- to sue the company. AA's creditors are waiting in the wings. It will be a miracle if AA's three-way accounting/style/advertising collision is resolved without a trip to bankruptcy court.

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Hat tip to the Preppy Princess.