Skip to Content

Five things reported about American Apparel CEO Charney’s ouster

American Apparel Hipster Turns Preppy As Stock May Be DelistedAmerican Apparel Hipster Turns Preppy As Stock May Be Delisted
Dov Charney of American ApparelPhotograph by Keith Bedford — Bloomberg via Getty Images

The rumors swirling around American Apparel’s recently-ousted President and Chief Executive Dov Charney kicked into high gear this week, with lengthy reports by both the Wall Street Journal and the New York Times speculating on his ejection from the controversial apparel company.

Media reports, analysts and investors are all trying to figure out one important detail: what finally led the board to get rid of Charney? The retailer’s stock traded as high as $15 in late 2007, but has languished for years as losses at the company have mounted. American Apparel’s annual loss last year swelled sharply to $106.3 million from $37.3 million in 2012. Litigation involving Charney have also been a concern.

Here are five juicy details that have surfaced this week:

1) Board members reportedly met at the Redeye Grill in Manhattan to plan Charney’s ouster. According to the Times, four American Apparel board members and their lawyer plotted a plan to fire the company’s founder and CEO over steaks and red wine. On that evening — June 17 — board member Allan Mayer agreed to lead the showdown with Charney the following day, the Times said.

2) American Apparel reportedly only had one lawyer in the United States at one point. Charney allegedly forced out important company executives over the past year, including General Counsel Glenn Weinman, the Times said. As a result, a company with about 10,000 employees was left with a single lawyer in the U.S.

3) Charney earlier this year began signing all of the company’s checks — hundreds of them every month, according to the Journal. That was one of several bottlenecks that plagued the retailer.

4) Charney at one point called a new distribution center home. Between August and November of 2013, the former CEO relocated to a California distribution center full time as he worked around the clock to fix a packaging snafu due to software problems. The issue cost the company $15 million, the Journal reported.

5) In May, new information emerged about another long-running lawsuit, the Times reported. That suit was brought by a former American Apparel store manager who alleged that Charney had used a homophobic slur against him and had assaulted him.