Wage Increases Forcing American Apparel to Move?

American Apparel has called Los Angeles home for 27 years, but that may be coming to an end in 2019. The clothing retailer’s downtown L.A. headquarters’ lease is up in 2019 — one year before California’s minimum wage is set to rise to $15 per hour. States on the East Coast, like North Carolina and Tennessee, have much cheaper minimum wages of $7.25 per hour, and could be a potential landing spot for the apparel retailer.

Total Retail’s Take: Unfortunately for its workers in Los Angeles, the move seems inevitable if American Apparel hopes to remain in business. The retailer shut down a facility in February and plans to close another in October. Five hundred workers were also laid off in April when American Apparel began to outsource its denim production. The company will clearly not be able to raise wages up to $15 an hour when the minimum wage law in California goes into effect in 2020. American Apparel advertises that its clothes are “designed, cut and sewn in Los Angeles.” For how much longer remains the question.