Controversial American Apparel founder, Dov Charney, has been ousted as chairman of the board of his own company, as an investigation into alleged misconduct is undertaken.
The board of American Apparel has voted to replace Charney as chairman and notified him of its intent to terminate his employment as president and CEO.
The termination will be effective following a 30 day cure period required under the terms of his employment agreement.
Allan Mayer and David Danziger have been appointed as co-chairmen, replacing Charney.
Mayer said said the board’s decision to replace Charney grew out of an ongoing investigation into alleged misconduct.
“We take no joy in this, but the board felt it was the right thing to do,” Mayer said.
“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.”
American Apparel later confirmed to media that Charney’s dismissal “was not the result of any problems with the company’s operations”.
Founded in 1991 as a wholesale business, American Apparel became a cult fashion retailer in the early 2000s, drawing attention for its controversial advertisements and scantily clad models.
Charney is known in the industry as having an overtly sexual nature, at times having walked around the office in only underpants, and conducting meetings wearing just a sock.
In the wake of his termination, a US newspaper has said Charney was shocked by the events, and plans to fight for his reinstatement.
American Apparel is working with a search firm to identify candidates for the job of permanent CEO.
“Based on our initial discussions with the search firm, we expect the list of possible successors will be impressive,” said Danziger, who has chaired the Board’s Audit Committee since 2011.
In the meantime, John Luttrell has been appointed interim CEO. Luttrell has been with American Apparel since February 2011 and currently serves as executive VP and CFO. He will also continue in those positions.
Prior to joining American Apparel, he was executive VP and CFO of Old Navy, The Wet Seal, and Cost Plus.
“We have one of the best known and most relevant brands in the world, with employees who are second to none; I believe we have a very exciting future,” said Luttrell.
“Our core business – designing, manufacturing, and selling American-made branded apparel – is strong and continues to demonstrate great potential for growth, both in the US and abroad. This new chapter in the American Apparel story will be the most exciting one yet.”
American Apparel operates 249 retail stores in 20 countries, including the US, Australia, Canada, Mexico, Brazil, UK, Ireland, Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Australia, Japan, South Korea, and China.
