Dov Charney, the controversial founder of Los Angeles-based American Apparel, was sacked Wednesday following years of sexual harassment allegations and litigation.
Dov Charney, the controversial founder of Los Angeles-based American Apparel, was sacked Wednesday following years of sexual harassment allegations and litigation.
The board of directors did not specify specific reasons for ousting Charney, the company’s chairman, president and CEO, in a press release after the unanimous vote. However, Britain’s The Daily Mail reported board member Allan Mayer, who will replace Charney as co-chairman, as saying that the firing “was prompted by an ongoing investigation into alleged misconduct.”
“We take no joy in this,” Mayer said in the release, “but the board felt it was the right thing to do.” An anonymous source told the Chicago Tribune that Charney was taken by surprise by the firing, and would “fight like hell to get this company back.”
Charney, who started his company in 1991 as a wholesale t-shirt manufacturer, has gone through numerous high-profile lawsuits since American Apparel moved into retail in the mid-2000s. Most of them have related to sexual harassment, such as a 2011 suit by a New York City store manager who said Charney repeatedly pressured her into performing sexual acts with him over eight months.
In 2012, a male store manager in California accused Charney of attempting to strangle him and rub dirt in his face. He also settled a 2009 lawsuit with Woody Allen after using the famed director’s face in an ad.
American Apparel relied on an feel-good model of business to sell its often-pricey clothing to socially conscious young people. Utilizing their “Made in America” tag, the company manufactures all of its apparel in a Los Angeles factory known for good working conditions and for its well-paid workers, who were largely female.
However, The New York Times referred to Charney as “a morally challenged provocateur” in a 2011 profile of him, reflecting not only his regular controversies, but also the sexually charged brand he developed for the company, with some of its racy ads featuring porn star models.
But was sexual indiscretion really the reason for Charney’s ouster? American Apparel’s financial health has been in the toilet for some time with the company’s stock declining by nearly 75 percent since a year ago. American Apparel posted a net loss of nearly $105 million for 2013.
Forbes reported American Apparel’s stock, which was valued at just 60 cents per share yesterday, had jumped value by 20 percent on news of the firing, so it’s hard to not notice a larger pattern here.
American Apparel opened its first Virginia store in Carytown in 2006, telling the Richmond Times-Dispatch that “the demographics were right and Richmond has been going through an urban renewal.”
There’s no word on how the change in leadership will affect the local store.
