The Dastardly Dreaded Groupon Effect strikes again! Over the fourth quarter of last year, American Apparel, that purveyor of domestic made goods for the would-be “fat hooker” market, racked up impressive sales. But that doesn’t mean they’re seeing the profits.
According to the New York Post, a flurry of Groupon discounts nationwide cut into margins. Despite doing a brisk business selling daily deals on “cardigans, corduroys and sexy leggings,” the Groupon offering may have cut American Apparel’s profits by nearly half last year.
Due to the loss, the company, which has been dodging bankruptcy rumors, may have tripped loan covenants regarding financial performance with Lion Capital, its primary lender, and could be forced to let go of employees.
But we’re forgetting the real revelation here: hipsters, apparently, are thriftier about spending their parents’ money than we thought.