Dov Charney, American Apparel’s notorious founder and former CEO, has been sacked from the fashion basics company again based on an investigation into his alleged misconduct and violations of company policy.
Charney was originally fired as CEO in June over an ongoing investigation into his alleged inappropriate sexual conduct with female employees, but had been acting as a consultant for the company since.
He fought back against the accusations, partnered with investment firm Standard General and tried to regain control of the company by raising his stake in it to 43 percent from 27 percent.
The board tried to thwart the attempt by issuing a shareholders rights plan, often referred to as a poison pill, that said if any person or group holding at least 15 percent of shares tried to increase their stake by even 1 percent, the poison pill would be triggered, ultimately flooding the market with cheap shares and diluting existing shares.
American Apparel said Tuesday that as a result of the investigation conducted by FTI Consulting, a special committee of the Board of Directors that oversaw the internal investigation has determined that it would not be appropriate for Charney to be reinstated as CEO or as an officer or employee of the company.
“While under suspension as CEO, Mr. Charney had been serving as a consultant to the Company. This relationship has now been terminated,” the statement noted.
Paula Schneider, a retail executive who formerly worked for Warnaco, will take over as American Apparel’s new CEO effective Jan. 5, 2015, and Scott Brubaker, who has been serving as interim CEO, will continue the post until then and stay on as a consultant “to ensure an orderly transition,” according to the company statement.
“American Apparel has a unique and incredible story, and it’s exciting to become part of such an iconic brand,” Schneider said. “My goal is to make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweatshop-free, Made in USA manufacturing philosophy.”
Co-chairman of the board David Danziger added, “This company needs a permanent CEO who can bring stability and strong leadership in this time of transition, and we believe Ms. Schneider fits the bill perfectly.”