But many don't seem to be turned off by the ads.
"It's kind of shocking," said Michael Natale, who edits a blog that writes about the East Village in New York City, where this particular ad was located. "But it still doesn't offend me."
Other posters felt differently, writing that the ads prompt them to "shy away" from the brand.
"I loved their anti-sweatshop stance and didn't mind paying a little more for a T-shirt knowing that they were not exploiting the people that made clothes," said Susan Heimbinder, a New Yorker who told ABCNEWS.com in an e-mail that she used to love the store, but now refuses to shop there. "However, my feelings began to shift after seeing another huge and explicit ad [in New York] with another woman [supposedly an employee] in a compromised position."
Since the first store opened in 2003, the Los Angeles-based company has gone international with 143 locations in 11 different countries and, according to The Economist, it boasted sales in 2006 that were estimated to be $300 million.
Attempting to make a brand unique, said Adrants.com's Hall, is a typical ploy. And while Charney may be capitalizing on sex to make money, other marketing experts said that his method could eventually backfire, much like it did for companies like Abercrombie and Fitch, which angered parents by publishing explicit catalogs that came in sealed packages, much like pornography magazines do.
"If you think about it from a perspective of a guy who is trying to sell his clothes, he took the cruelty-free approach, which would appeal to the animal rights PETA members, the vegetarians and the vegans," said Roberta Clarke, branding expert and marketing professor at the school of management at Boston University. "But that wasn't enough to attract attention, and sex sells."
"[Charney] is intent on getting the awareness with the billboards, but with some people the perception is that this guy is engaging in pedophilia by virtue by having fairly young girls in pornographic positions," said Clarke. "Yes there are freedoms, but there are also responsibilities. This seems irresponsible."
When the sex in ads goes too far, said Clarke, and offends too many people, that is usually the time when the "sex sells" rule is abandoned. Parents also play a big role in the success of companies, Clarke added. If parents start to reject American Apparel, it's likely Charney would have no choice but to reconsider his marketing plan.
But for now, American Apparel is still turning heads, garnering media attention and, well, critics — just what a company hoping to expand wants.
"The problem is that you can't [prosecute] bad taste," said Clarke. "So while a lot of people might find the ads offensive, they still take notice."