November 12, 2008

American Apparel Issues Statement in Response to Baseless and Frivolous Lawsuit

LOS ANGELES, Nov 12, 2008 (BUSINESS WIRE) -- American Apparel, Inc. (NYSE Alternext US: APP), issued the following statement in response to news reports of a frivolous and baseless lawsuit recently filed by a disgruntled former employee:

American Apparel denies all of the allegations in Mr. Hernandez's lawsuit and will vigorously defend itself and its shareholders in this contemptible action. Mr. Hernandez was a non-accounting employee in the information technology department who was terminated for legitimate reasons. The allegations in this lawsuit are fictional, which the company believes represents a cynical attempt to extract phony leverage by Mr. Hernandez's counsel, Keith Fink, who has been engaged with the company in other litigation for over three years. The facts are that Mr. Charney had no personal management responsibility nor influence over the work of Mr. Hernandez and played no role in his termination in 2006.

American Apparel is proud of its performance and its business success. In an industry that is struggling due in part to very challenging economic conditions, American Apparel was one of only a handful of companies that reported strong sales in October, leading the industry with a same-store sales increase of 22%. In addition, this week the company reported record revenue of $154.8 million for the third quarter of 2008, exceeded analysts' earnings estimates, and re-affirmed its full-year earnings guidance.

It is unfortunate that the media continues to focus on sideshows and false allegations. It does a disservice to the 10,000 men and women who make American Apparel such an outstanding company; to our customers who love our products; and to our investors who appreciate our strong financial performance and our dedication to being a leading public company. We are confident that these allegations will be dismissed and look forward to our day in court.

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 October 31, 2008, American Apparel employed over 10,000 people and operated more than 230 retail stores in 19 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea, and China. 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 may contain forward-looking statements which are based upon the current beliefs and expectations of our 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, including, among others: changes in the level of consumer spending or preferences or demand for our products; increasing competition; our ability to hire and retain key personnel and our relationship with our employees; suitable store locations and our ability to attract customers to our stores; effectively carrying out and managing our growth strategy; failure to maintain the value and image of our brand and protect our intellectual property rights; declines in comparable store sales; seasonality; consequences of our significant indebtedness, including our ability to comply with our debt agreements and generate cash flow to service our debt; costs of materials and labor; location of our facilities in the same geographic area; manufacturing, supply or distribution difficulties or disruptions; risks of financial nonperformance by customers; investigations, enforcement actions and litigation; compliance with or changes in laws and regulations; costs as a result of operating as a public company; material weaknesses in internal controls; interest rate and foreign currency risks; loss of U.S. import protections or changes in duties, tariffs and quotas and other risks associated with international business; our ability to upgrade our information technology infrastructure and other risks associated with the systems that operate our online retail operations; general economic and industry conditions; and other risks detailed in our filings with the Securities and Exchange Commission, including our 2007 Annual Report on Form 10-K. Our filings with the SEC are 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.

Media:
Sloane & Company
Elliot Sloane, 212-486-9500
or
Investors:
ICR, Inc.
Joseph Teklits / Jean Fontana
203-682-8200

Copyright Business Wire 2008

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