Yes, I believe American Apparel can survive, however, some changes are a must.
Their wholesale business is suffering, because they don’t allow wholesale customers a private label option.

Their wholesale customers are paying a premium price vs foreign made t-shirts and can’t effectively brand the garment with a custom label. The foreign made products offer tear away labels. American Apparel should work with entrepreneurs by allowing them to get their brand label sewn in during production.

American Apparel must stay true to the American Made mission. This mean robotics are the only option for them. This can be a huge win, if it lowers the cost per unit for entrepreneurs. I hope they’re monitoring the progress of http://softwearautomation.com. They are developing sewbot technology that could be the future for American Apparel.

My thoughts for this post are in response to this article which questions the future of American Apparel: http://fortune.com/2015/10/21/american-apparel-bankrupt-domestic-production/