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American Apparel ousts Dov Charney 'for cause,' cites misconduct investigation
BY SHAN LI
June 18, 2014, 8:59 p.m.
L.A. Times
BY SHAN LI
June 18, 2014, 8:59 p.m.
Dov Charney, the controversial chairman of American Apparel, was ousted Wednesday by the company's board of directors, which said the action "grew out of an ongoing investigation into alleged misconduct."
The board voted to replace Charney as chairman and "notified him of its intent to terminate his employment as president and CEO for cause," according to a statement.
The action suspends Charney immediately. Under the terms of his employment, a 30-day period is required before termination, according to the statement. The board acknowledged that the management changes may trigger "an event of default under its credit agreements" and said it will seek a waiver from lenders.
Allan Mayer and David Danziger were appointed by the board as co-chairmen.
“We take no joy in this, but the board felt it was the right thing to do,” Mayer said in the statement. “Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead.”
When reached by phone by a Times reporter, Charney hung up.
Charney, 45, was born in Montreal and began making basic T-shirts under the American Apparel name in 1991. His company gained momentum in 1997 with his design of the Classic Girl line, which is when he moved the business to Los Angeles.
He was the founder and CEO of American Apparel, which began as a wholesale brand and expanded in 2003 into the retail market.
He has battled repeated accusations of sexual harassment in recent years and had been publicly backed by the company.
In 2011, American Apparel lashed out when four female former employees filed a sexual harassment suit. At the time, the company told The Times that the four women were friends who were colluding to "shake down" Charney and the company for money and that it had "voluminous evidence" to prove that the allegations were false.
In 2012, Charney was accused in a wrongful termination suit of choking and rubbing dirt in the face of a former store manager in Malibu. Charney also was accused of calling the employee "a wannabe Jew" and a "***" and asked if he was sleeping with a certain girl. The company denied the allegations.
He has also become a well-known advocate for the Made in the U.S.A. movement and for immigration reform. American Apparel’s clothing is manufactured out of a factory in downtown Los Angeles, and he has emphasized that the company is "sweatshop-free."
Still, in recent years, the company has had to remove a third of its workforce after employees were found without required documentation. And its ads, some shot by Charney, have raised eyebrows or racy themes in public locations.
This year American Apparel has fought to retain its listing on the New York Stock Exchange while buried in negotiations over financing -- efforts that the retailer said would force it to file its annual report late.
According to the release regarding Charney's ouster, American Apparel has about 10,000 employees and retail stores in 20 countries.
Board members said Wednesday that they planned to work with a search firm to identify a permanent chief executive.
Terry Fahn, a spokesman retained by American Apparel, declined to comment beyond the details in the press release.
Times staff writer Megan Garvey contributed to this report
L.A. Times
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