Customers may think the shirts and other basic clothes are hip and the maker socially responsible, but experts in retail and the economy say the company's success lies in something the dark-suit crowd could like - a smart business model. American has become one of the largest U.S. garment makers because of its in-house production system, direct shipping to its stores and the creation of a distinct image, experts say.

Most clothing and other low-tech products are now made in countries such as China, where wages are a fraction of those in the United States. Each year, the number of U.S. jobs in the garment industry declines, said Peter Morici, an economist and professor at the University of Maryland's Robert H. Smith School of Business.

Photo(s); 1. Sales associate Lauren Hussong arranges unitards at the American Apparel store on Light Street in Federal Hill. Customers think the clothes are hip and the maker is socially responsible. 2. Gold lam triangle tops shine at Ameri can Apparel. The store is known for basic clothing with labels that say "Made in USA."; Credit: PHOTOS BY BARBARA HADDOCK TAYLOR : SUN PHOTOGRAPHER