May 13, 2008

American Apparel Purchases Assets from U.S. Dyeing & Finishing, Inc.

LOS ANGELES, May 13, 2008 (BUSINESS WIRE) -- American Apparel, Inc. (Amex: APP) announced that on May 9, 2008 it completed an asset purchase agreement with U.S. Dyeing & Finishing, Inc. to purchase the assets of a fabric dyeing and finishing facility for approximately $3.8 million. American Apparel funded the purchase price through cash on hand.

The facility, located in Garden Grove, California, has performed contract work for American Apparel for approximately ten years. The purchased assets include machinery and equipment related to fabric dyeing and finishing, including industrial dyers, washers, compressors, and boilers. American Apparel also assumed the lease for two adjacent buildings totaling approximately 135,000 square feet.

Marty Bailey, Chief Manufacturing Officer of American Apparel, stated: "The purchase of U.S. Dyeing & Finishing is an important addition to American Apparel's production capacity. While American Apparel already operates one of the largest cut-and-sew operations of its kind, this acquisition will further reduce our reliance on contract dye facilities, allowing us to expand our product offering, streamline our supply chain, lower costs, and ensure better quality control. We are pleased to welcome the manufacturing employees of U.S. Dye to the American Apparel family."

With the acquisition of these assets and the additional investments planned at this facility in the future, the company believes it will be able to bring virtually all of its dyeing volume in-house. Approximately 140 manufacturing employees of U.S. Dyeing & Finishing have or will become employees of American Apparel as a result of the acquisition. American Apparel intends to work with the remaining third party customers of U.S. Dye to ensure a smooth transition.

Robert Lee, President of U.S. Dyeing & Finishing stated, "We are grateful for the nearly decade-long partnership we have forged with American Apparel, which has culminated in this transaction. Given American Apparel's progressive track record of taking care of its employees, we are pleased that our workers are becoming employees of American Apparel, a company we are confident has a long and bright future ahead of it."

About American Apparel

American Apparel is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of May 10, 2008, American Apparel employed over 7,000 people and operated 187 retail stores in 15 countries, including the United States, Canada, Mexico, United Kingdom, Belgium, France, Germany, Italy, the Netherlands, Sweden, Switzerland, Israel, Australia, Japan and South Korea. American Apparel also operates a leading wholesale business that supplies high quality T-shirts and other casual wear to distributors and screen printers. In addition to its retail stores and wholesale operations, American Apparel operates an online retail e-commerce website at http://store.americanapparel.net.

Safe Harbor Statement

This press release, and other statements that American Apparel, Inc. may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and include statements regarding, among other things, the company's future financial condition and results of operations and the company's prospects and strategies for future growth. In some cases, you can identify forward-looking statements by words or phrases such as "trend," "potential," "opportunity," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" and similar expressions.

Such forward-looking statements are based upon the current beliefs and expectations of American Apparel's management, but are subject to risks and uncertainties, which could cause actual results and/or the timing of events to differ materially from those set forth in the forward-looking statements. American Apparel cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. The following factors, among others, could cause actual results to differ from those set forth in forward-looking statements: business conditions, including risks associated with foreign markets, international business and online retail operations, increases in materials or labor costs and employee matters; the company's relationships with its lenders and its ability to comply with the terms of its existing credit facilities; changing interpretations of generally accepted accounting principles; changes in the overall level of consumer spending; changes in preferences in apparel or the acceptance of the company's products and the company's ability to anticipate such changes; the performance of the company's products within the prevailing retail environment; availability of store locations at appropriate terms and our ability to open new stores and expand internationally; the possibility that the company's suppliers and manufacturers may not timely produce or deliver the company's products; financial non-performance by the company's customers, primarily in the wholesale business; inquiries and investigations and related litigation; continued compliance with U.S. and foreign government regulations; legislation or regulatory environments; requirements or changes adversely affecting the business in which the company is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition, both domestic and foreign, from other apparel providers; changes in key personnel; costs as a result of operating as a public company; general economic conditions; increases in interest rates; geopolitical events and regulatory changes; as well as other relevant risks detailed in the other filings that the company makes with the Securities and Exchange Commission and available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements speak only as of the date on which they are made and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

SOURCE: American Apparel, Inc.

ICR
Joseph Teklits/Jean Fontana
203-682-8200

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