UPDATE 1-American Apparel sees real estate opportunity
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DANA POINT, Calif. Jan 16 (Reuters) - American Apparel Inc (APP.A) Chief Executive Dov Charney said on Wednesday he saw opportunity in retail real estate for the fast-growing company, given the struggles of many rivals amid the economic downturn.
"There's a lot of real estate out there now because a lot of retailers are struggling," Charney said, speaking at the ICR XChange Conference for consumer companies. "That's an opportunity for us."
The trendy clothing company that makes and sells its own casual cotton apparel has been growing its retail base of over 180 stores in the United States, Canada and internationally since its late 2006 merger with Endeavor Acquisition Corp.
Some apparel retailers, such as Pacific Sunwear of California (PSUN.O) and Coldwater Creek Inc (CWTR.O), have already said they would close stores or scale back expansion plans and some analysts believe others will follow.
Charney said his target customer of young adults in cosmopolitan cities is more isolated from any economic downturn. Consumers in the United States who own homes have curbed their spending in light of higher gasoline prices and the fallout from the housing slump and credit crisis.
"We're very optimistic because we've been working on carving out a market niche," Charney said.
Of his customers, he said: "They have no credit or poor credit, they don't own a home ... they rent apartments with no heating bills and they generally don't drive."
U.S. retailers were hard-hit over the holidays and since the beginning of the year retailers' shares have fallen sharply. The Dow Jones U.S. Retail Index .DJUSRT is down 7 percent since Jan. 1.
"I'm not glad the market is upside down but I look forward to the opportunity of beating the odds," Charney added.
Shares of American Apparel, which closed at $12.65 on the American Stock Exchange on Wednesday, are down 16 percent since the beginning of the year and 20 percent below its 52-week closing high of $15.80 reached in December. (Reporting by Alexandria Sage; Editing by Jeffrey Benkoe, Phil Berlowitz)
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