Visit Health Watch for COVID-19 updates. Find Employee Return to Campus and Student Return to Campus information.
Emergency Notification

News Release | MBA - Jan. 17, 2008

January 17, 2008

Note to editors and news directors: To arrange interviews with members of the MBA students’ team and their advisors, contact Public Affairs at (323) 343-3050. (See photos below release.)


As merger looms, team creates best-case scenario


Cal State L.A. MBA students focus on American Apparel, Inc.;
their ‘blank check’ case study earns top North American honors



Los Angeles, CA – When American Apparel went public in an innovative $800 million merger with a “blank check” corporation last month, a team of Cal State L.A. graduate business students clearly saw it coming.

They had, after all, “cased” the Los Angeles-based casual-clothing business, and their study had recently earned them the North American Case Research Association’s (NACRA) Outstanding Student-written Case Award.

According to the five-member team’s case synopsis: “American Apparel…had become the largest vertically-integrated garment manufacturer in the U.S., bucking a trend in the garment industry to outsource manufacturing to low-cost countries.” The style of its founder and CEO “generated controversy that most publicly traded companies eschewed….

“The very way the company had chosen to go public indicated much about the CEO’s refusal to conform to tradition: (it) would merge with the publicly traded specialty acquisition corporation, Endeavor…. Would outsiders’ scrutiny of its CEO, its provocative marketing, and progressive personnel policies and social agenda force the company to make changes in strategy and culture?”

The Cal State L.A. study team included Christina Eaves, Sandy Johnson, Lisa Tousant, Sheridan Mascarenhas and William Drescher. Management professors Ellen Drost and Stephen McGuire served as advisors.

The students relied on more than 100 sources, including interviews, a fieldtrip to the company, articles and published financial reports. Eaves said, “Every interview we watched or article we read provided a little piece of information, which we were able to compile into a well-documented case study.”

In a complementary case study, the same Cal State L.A. team examined New York-based Endeavor Acquisition Corp., what Johnson called a shell corporation of Wall Street investors created solely to acquire promising companies. Officially it’s a SPAC—a Special Purpose Acquisition Company. Colloquially they’re called “blank-check” corporations, said Johnson.

“They’re in it to make money,” she said. “So they look for a company that’s a rising star. SPACs are a relatively new vehicle to take private companies public, but the jury is out as to how well they will perform in this function.”

According to the American Stock Exchange (Amex), in December when Endeavor acquired American Apparel in a transaction valued at more than $800 million in stock, cash and assumption of debt, it gained a provocative apparel company with more than 6,700 employees, more than 175 retail stores, operations in 13 countries, and a wholesale business supplying T-shirts and other casual wear to distributors and screen printers.

With American Apparel anchored in downtown Los Angeles, about five miles from Cal State L.A., the close-at-hand, cutting-edge case study provided a new, emerging teaching structure, what Professor McGuire calls “a rich learning experience for the researcher well beyond textbook and lectures.”

The analysis has been prepared for publication in Case Research Journal.

Along with the American Apparel and Endeavor Acquisitions projects, two other Cal State L.A. student-written case studies were among the roughly 100 accepted for the 2007 NACRA conference (held in Keystone, Colo., in October). David Linnevers, Oxana Lavrova and Ryan Tash were also nominated for their study of Megatoys. Tash’s examination with Omar Ba-Akeel of the case of The Coffee Bean & Tea Leaf was also accepted by NACRA. Megatoys and The Coffee Bean & Tea both operate internationally with headquarters in Los Angeles.

The student teams competed with doctoral and master’s students from North America, Europe, Asia and Australia. Professor Kern Kwong also served as an advisor.

According to McGuire, Cal State L.A. students have prepared more than 50 case studies in the past four years and are continuing case research on local entrepreneurs. Companies interested in being the focus of a student-written case study are invited to contact the University’s Entrepreneurship Institute at (323) 343-2897 or email McGuire at


High-resolution photos available upon request.


Participants gather for photo


Cal State L.A. participants at the North American Case Research Association meeting in Colorado included (l-r) Sandy Johnson, Lisa Tousant, Professor Stephen McGuire, Christina Eaves and Ryan Tash. Johnson, Tousant and Eaves were on the team honored for its study of American Apparel, Inc. Tash’s study focused on Megatoys.


Christina and Sandy pose with the city of Los Angeles as backdrop

Christina Eaves (l) and Sandy Johnson (r) worked with three other business graduate students to develop an award-winning case study of American Apparel.


Working for California since 1947: The 175-acre hilltop campus of California State University, Los Angeles is at the heart of a major metropolitan city, just five miles from Los Angeles’ civic and cultural center. More than 20,000 students and 200,000 alumni—with a wide variety of interests, ages and backgrounds—reflect the city’s dynamic mix of populations. Six colleges offer nationally recognized science, arts, business, criminal justice, engineering, nursing, education and humanities programs, among others, led by an award-winning faculty. Cal State L.A. is home to the critically-acclaimed Luckman Jazz Orchestra and to a unique university center for gifted students as young as 12. Among programs that provide exciting enrichment opportunities to students and community include an NEH- and Rockefeller-supported humanities center; a NASA-funded center for space research; and a growing forensic science program, housed in the Hertzberg-Davis Forensic Science Center.


# # #