American Apparel to Oust Founder and CEO Dov Charney
The American Apparel Board has voted to suspend and remove founder and ceo Dov Charney. The company plans to terminate Charney as ceo and chairman following a 30-day cure period required under the terms of Charney's employment agreement. American Apparel says Charney was suspended "for cause."Chief financial officer John Luttrell will serve as interim ceo. Allan Mayer and David Danziger have been appointed as co-chairman. Mayer says in a statement, "We take no joy in this, but the Board felt it was the right thing to do. 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. The Board is working with a search firm to identify candidates for the job of permanent CEO and, based on our initial discussions with the search firm, we expect the list of possible successors will be impressive."
As CNN notes, Charney has been the target of some sexual harassment suits by former employees. A big change ahead for American Apparel could be to launch more wholesome advertising campaigns and redo the image of the brand. The American Apparel ads under Charney are notorious for being racy and sexually charged.
The New York Post thinks the ousting of Charney means the entire company is likely soon to be up for sale. The company has been recording large losses.
Posted on June 19, 2014