American Apparel lays off workers, mulls some outsourcing: LA Times

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April 12 (Reuters) - Teen apparel retailer American Apparel Llc is laying off hundreds of workers as it overhauls its production process, which could include outsourcing part of its production to another U.S. manufacturer, the Los Angeles Times reported on Tuesday.

"If we do decide to produce some pieces out-of-house, they will still be American-made," Chief Executive Paula Schneider wrote in a letter obtained by the Times.

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Schneider said a mismatch between workers and manufacturing was an inefficiency that needed to be addressed as part of the company's turnaround efforts, the Times reported, adding the move came after "months of careful and rigorous review."

The retailer will also cut down on the number of garments it makes throughout the year, to clear inventory.

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American Apparel lays off workers, mulls some outsourcing: LA Times
An American Apparel store logo is pictured on a building along the Lincoln Road Mall in Miami Beach, Florida March 17, 2016. REUTERS/Carlo Allegri
An American Apparel store logo is pictured on a building along the Lincoln Road Mall in Miami Beach, Florida March 17, 2016. REUTERS/Carlo Allegri
In this Friday, June 19, 2015 photo, American Apparel CEO Paula Schneider poses for a photo in Los Angeles. American Apparel is North Americaâs largest apparel manufacturer. (AP Photo/Damian Dovarganes)
This July 9, 2015 photo shows signage at the American Apparel store in the Shadyside neighborhood of Pittsburgh. (AP Photo/Keith Srakocic)
Passers-by walk past a sandwich-board sign advertising dog fashions in front of the American Apparel store in the Shadyside neighborhood of Pittsburgh on Wednesday, July 9, 2014. American Apparel Inc. has reached a preliminary deal with investment firm Standard General to receive $25 million in financing to bolster the clothing chainâs finances, according to a person close to the negotiations. (AP Photo/Keith Srakocic)
A man walks past the American Apparel headquarters in Los Angeles April 1, 2011. Clothing chain American Apparel, known for racy advertising and its founder's legal problems, may file for bankruptcy if it does not get enough money to keep running, and might even have to liquidate, the company said. REUTERS/Mario Anzuoni (UNITED STATES - Tags: BUSINESS)
A tag hangs of a piece clothing in the window of an American Apparel Inc. store in Chicago, Illinois, U.S., on Monday, Oct. 5, 2015. American Apparel Inc. bought itself time and relief when it filed for bankruptcy protection today, but there's still a long way to go if the struggling retailer is to pull itself out of a sales rut and win back shoppers. Photographer: Daniel Acker/Bloomberg via Getty Images
NEW YORK, NY - OCTOBER 05: The American Apparel logo is displayed outside of a store on October 5, 2015 in New York City. American Apparel has filed for Chapter 11 bankruptcy protection nearly a year after the ousting of founder and CEO Dov Charney. In its latest quarter, the youth driven clothing company reported a loss of $19.4 million. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - OCTOBER 05: The American Apparel logo is displayed outside of a store on October 5, 2015 in New York City. American Apparel has filed for Chapter 11 bankruptcy protection nearly a year after the ousting of founder and CEO Dov Charney. In its latest quarter, the youth driven clothing company reported a loss of $19.4 million. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - AUGUST 19: An American Apparel store is viewed on August 19, 2015 in New York City. The youth clothing retailer reported a net loss of $19.4 million for last quarter and has said it may go out of business in the near future. Blaming the closing of stores closing and a strong dollar, Los Angeles-based company said sales were down 17% last quarter. (Photo by Spencer Platt/Getty Images)
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As part of the layoffs, which started last week, about 500 employees have lost their jobs, the newspaper said.

An American Apparel spokeswoman declined to comment.

The fashion chain, known for its "Made in the U.S.A." fashion, filed for bankruptcy in October following years of losses and expects to be profitable in 2018.

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