5 reasons American Apparel CEO Dov 'Pants Optional' Charney had to go

The brand's founder has been repeatedly accused of sexual harassment, while share price is now below $1. His board has finally had enough.

by Emma Haslett
Last Updated: 01 Jul 2014

Dov Charney may have founded one of the most successful clothing labels to come out of the US in recent years – but since then, he’s pretty much been a liability.

You name it, Charney’s done it, and last night his company announced it’s had enough: ‘We take no joy in this,’ said board member Allan Mayer – before going on to announce that Charney has been removed as chairman and will be sacked as president and chief executive, too.

‘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,’ said Mayer. Charney will be temporarily replaced by finance director and vice president John Luttrell, although Mayer added the company has already begun a search for a full-time chief exec.

‘Based on our initial discussion with the search firm, we expect the list of possible successors will be impressive,’ Mayer added.

The company’s statement cited only ‘cause’ as its reason for firing Charney. What could he possibly have done to deserve such an undignified ousting? Funny you should ask, actually…

1. He’s repeatedly been the subject of sexual harassment lawsuits

The accusations levelled against Charney are too many and various to detail them all, but among some of the lawsuits he’s been involved in are the former employee who accused him of keeping her as a teenage sex slave (she was too scared of losing her job to leave) and the 2011 suit where four female employees filed a sexual harassment claim (although many cases have exonerated Charney and in one case American Apparel settled out of court). He’s also been accused of requesting that ‘ugly people’ are fired, and refers to his employees as ‘sluts’ and ‘whores’, later explaining that ‘some of us love sluts. It could also be an endearing term’.

2. He doesn’t get on with male employees particularly well, either

In 2012, Charney was sued by a former store manager, who accused Charney of choking him, throwing dirt at him, calling him a ‘fag’ and a ‘wannabe Jew’.

3. His relationship with the press is terrible

In 2004, journalist Claudine Ko of now defunct magazine Jane reported that Charney had, er, pleasured himself ‘eight or so’ times during an interview about business forecasts, before requesting (and receiving) oral sex from one of his employees. If that’s not a fireable offence, we’re not sure what is…

4. He’s terrible with money

Since the company went public in 2007, its share price has almost consistently fallen, beginning at just under $12 and dropping to 64 cents now. In 2011, the company issued a warning that there was ‘substantial doubt’ it could continue as a going concern. Although it pulled itself away from the brink of bankruptcy then, things still aren’t looking good for shareholders.

5. He hired illegal immigrants

In 2009 the US Immigration and Customs Enforcement agency found that 1,600 of the workers at its factory in Los Angeles (which forms the basis of its ‘ethical’ reputation) were illegal immigrants. Another 200 ‘could not be verified’.  Interesting hiring policy…

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