Last month I wrote an article on American Apparel’s financial woes and how the company might be facing some troubles on the horizon. Well, say hello to trouble.
The company has just suspended the founder, president and CEO Dov Charney on alleged misconduct. This is the first step to eventually terminating Charney altogether. Apparently a slow decline on sales is one thing, but the numerous sexual harassment allegations and lawsuit and employee abuse record are the real influence behind the decision. Details have not been released, but it appears Charney has been accused of misconduct once again.
The buildup of negativity against Charney still did not prepare him for the sudden decision by the board. He claims to have been blindsided by the decision and will fight to get his job back.
Although Charney isn’t happy about it, the board of directors seems rather giddy to have gotten rid of him. In a recent statement they emphasize their “regret” to have made such a decision, but go on to talk about the more exciting and profitable future of the company. They have even already compiled a list of possible candidates for the new CEO position.
But even with Charney out of the picture, will American Apparel be able to make a comeback? They are millions in debt and have a pretty dodgy public image. Who would be willing to step up and take on the challenge that is American Apparel? Whoever it is will need all the luck they can get.