Oct 6th, 2015 by Scott Hebert
In Thread 1, Roxanne and I explored the possibility of the University of North Texas acquiring American Apparel. Obviously, this idea is a bit fanciful, and might be extremely problematic considering the for-profit nature of American Apparel. That being said, it is a fun mental exercise, and who wants to see UNT financially successful more than her MBA candidates?
Originally, we had no intention of integrating UNT with American Apparel. Our original idea was that American Apparel needs a cash infusion as the approach bankruptcy and the two organizations serve a similar market. The first area of integration that makes sense is to actually reposition American Apparel to target the same market as UNT’s undergraduate programs. As previously noted, staying on top of fashion trends is difficult for the entire apparel industry (Spencer, n.d.). Repositioning American Apparel to target undergraduate students narrows their target market considerably, but makes tracking of fashion trends much more manageable. Additionally, with access to 41,000 students at the university, American Apparel has access to an easily accessible focus group (Grant Thornton LLP, 2015).
Mismanagement has been the hallmark of American Apparel to date. Internal drama and external lawsuits have distracted the company. Additionally, the firm has shown an inability to plan seasonally — an absolute priority in the fashion industry (Tabuchi, 2015). Although the University of North Texas operates as a non-profit, part of the university’s mission is the training of business professionals via its College of Business. As of 2013, UNT’s College of Business was training over 5,000 students to become excellent business people (University of North Texas [UNT], n.d.). Although it would be inappropriate to use these students to involuntarily further the business ventures of American Apparel, it would be appropriate to use UNT’s business school resources for consultation and job placement. Additionally, many companies credit their management training programs as a pillar of their success. Nestle is an example of an multinational corporation that has invested heavily in the training of its corporate management. In fact, Nestle is so sure of this program, they have their own training center near the corporate headquarters in Switzerland (Reichlin, 2004). The merger of UNT and American Apparel offers an excellent opportunity for the university to funnel leadership candidates into American Apparel and for American Apparel to train its internally sourced management candidates.
Finally, on a lighter note, it would be extremely beneficial for American Apparel to funnel profits back into the University of North Texas once it becomes profitable. Those profits could be used to fund a number of programs and scholarships at the university. An excellent example of a program at UNT that needs funding is baseball. As of 2014, the UNT baseball steering committee had raised nearly half of the $8 Million needed to build a stadium near Apogee Stadium. Although the university is clearly dedicated to bringing NCAA baseball back to UNT, finding the funding for the program has been difficult (Vito, 2014). Turning around an ailing American Apparel might be just the shot in the arm UNT needs.
Grant Thornton LLP. (2015, July 31). Consolidated Annual Financial Report and Independent Auditors’ Report. Retrieved October 5, 2015, from https://www.untsystem.edu/ereports/FY14%20UNTS%20Audited%20CAFR%20-%20FINAL.pdf.
Reichlin, I. (2004). Getting the global view: Nestle, led by Peter Brabeck-Letmathe, climbs to the #1 spot in this year’s Best Companies for Leaders. The Chief Executive. Retrieved October 5, 2015, from http://chiefexecutive.net/getting-the-global-view/.
Spencer, M. (n.d.). Industry Analysis: Apparel. Value Line. Retrieved October 5, 2015, from http://www.valueline.com/Stocks/Industries/Industry_Analysis__Apparel.aspx#.VhMRr_lVhHw.
Tabuchi, H. (2015, October 5). American Apparel files for Bankruptcy. The New York Times. Retrieved October 5, 2015, from http://www.nytimes.com/2015/10/06/business/american-apparel-files-for-bankruptcy.html?_r=0.
University of North Texas. (n.d.) College of Business: Fast Facts 2014. Retrieved October 5, 2015, from http://www.cob.unt.edu/about/fastfacts.php.
Vito, B. (2014, April 19). Baseball: UNT’s financial issues put baseball on hold. Denton Record-Chronicle. Retrieved October 5, 2015, from http://www.dentonrc.com/sports/colleges/north-texas-headlines/20140419-baseball-unts-financial-issues-put-baseball-on-hold.ece.