Ousted American Apparel Founder Dov Charney Says He’s Secured $10 Million Loan for New Venture
Dov Charney is back—and is very optimistic about his future.
The controversial founder and former CEO of American Apparel has founded a T-shirt company with some of his old colleagues and has already “received indication of interest from major clients in that space,” he tells Fortune.
Charney says that he has “a business that could go into the hundreds of millions in sales,” based on the fact that he generated “five billion in sales in the ten years prior to my departure from American Apparel.”
“I know how to sell,” he says. “I’m a member of the demographic which I serve, and I have no intention of leaving this industry and I plan to go into it very forcefully.”
For now, the new brand is selling exclusively to other apparel companies, though Charney says he plans to sell to consumers “soon.”
Similarly to American Apparel (APP), which he founded in 1989 and was forced out of in 2014, Charney’s new company will begin with basic products that will be made exclusively in Los Angeles—though not in downtown L.A., which Charney notes he has been “priced out of.”
Instead the focus is on south L.A., which is also the subject of Charney’s new personal photo blog, “That’s Los Angeles.”
“It’s really the inspiration behind the whole brand. . .we think that Los Angeles is a special place where art, commerce, creativity, manufacturing, and passion come together like nowhere else,” he says.
He also says that the blog is an attempt to show his customers what he stands for: “I’m authentic person, I have a true voice,” he says.
The founder declined to share details about financing, though he did mention that it is “easy” for him to get unsecured financing because of his industry connections. He also says he was a $10 million asset-based loan—though he declined to say from whom.
In April, Bloomberg reported that Charney was in talks to receive $20 million for the new venture from Hagan Capital Group, which was one of the investors behind a $300 million bid backing Charney’s return to American Apparel. Hagan also did not respond to Fortune regarding the firm’s involvement in the venture.
The new venture comes nearly two years after American Apparel terminated Charney as CEO. While he was chief, Charney faced repeated accusations of sexual harassment from store employees, though he notes that he was not forced out of the company for that reason. (The company’s board of directors said at the time the ouster “grew out of an ongoing investigation into alleged misconduct.”) Charney has vehemently denied all allegations of the kind and is suing the company for fraud and wrongful termination.
Last month, reports emerged that American Apparel, which is currently helmed by Paula Schneider, was exploring a sale. The process comes just six months after the company emerged from Chapter 11 bankruptcy, for which it filed this time last year.