A special committee concluded that ‘it would not be appropriate’ for Charney to remain an employee
It's bye bye Dov, this time for good. Six months after American Apparel ousted founder Dov Charney from his role as chairman and suspended him as president and CEO, the company has finally made the move to fire him for cause. This follows a six-month investigation by a special committee of the board into Charney's long and florid history of alleged sexual misconduct.
American Apparel concluded in a statement: “Based on this investigation, the special committee determined that it would not be appropriate for Mr Charney to be reinstated as CEO or an officer or employee of the company.”
Over the past months, Charney has tried to claw back some control of his company, which he set up in 1989. This included borrowing money to hoover up American Apparel shares to increase his share of the company and working as a consultant for the retailer. He even popped up to speak during a weekly conference call with store managers (awkward).
Charney said in a statement: “I’m proud of what I created at American Apparel and am confident that, as its largest shareholder, I will have a strong relationship with the company in the years ahead. Naturally, I am disappointed with the circumstances and my over 25 years of deep passion and commitment for American Apparel will always be the core DNA of the company.”
The nightmare isn't over for American Apparel yet. According to WWD, firing Charney for cause “opens up the retailer to a potentially taxing and very expensive legal battle just as new management tries to plot and then execute on a tricky turnaround”.
Paula Schneider, who previously worked in senior roles for BCBG Max Azria and Laundry by Shelli Segal, has been named as new CEO. She replaces interim CEO Scott Brubaker. In the meantime, sales at American Apparel are falling – the company reported losses of $19.2 million in the third quarter. Maybe Brendan can help?