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Dov Charney Hints at Possible American Apparel Coup

Dov Charney Hints at Possible American Apparel Coup
americanapparel.net

Dov Charney, the nude-strolling, publicly masturbating lawsuit magnet of a fashion company CEO, said in a federal filing this week that he intends to fight his dismissal from downtown L.A.-based American Apparel.

Not only that, but it sounds like he's warning of a possible coup against the very board of directors that last week let him go because of what the company described as "an ongoing investigation into alleged misconduct."

Speculation about the alleged misconduct naturally focused on Charney's liaisons with young, female employees who sometimes model for him and, in at least one case, possibly hang out with the American Apparel founder as he dances nude (see the NSFW video here):

Charney has reportedly said he'll sue over the termination.

A Monday filing with the U.S. Securities and Exchange Commission says, "Mr. Charney believes that such termination is without merit and intends to contest it vigorously."

The document, drafted by Charney's attorney, John Laco, says that Charney was approached by stockholders who "expressed support for his continued leadership" at American Apparel and said they have talked about "potential changes to the composition of the Board and management."

It says:

Mr. Charney intends to engage in discussions with the Issuer [American Apparel] and Issuer's management and the Board, other stockholders of the Issuer and other persons that may relate to the aforementioned matters and/or other matters related to governance and board composition, management, operations, business, assets, capitalization, financial condition, strategic plans and the future of the Issuer.  

Sounds like a possible coup attempt to us. 

Dov Charney Hints at Possible American Apparel Coup
americanapparel.net

Charney founded American Apparel in his hometown of Montreal and moved it to L.A. in 2000. In 2006 he sold it to an acquisition company, and the firm was eventually taken public on the stock market. Charney got the title of president and CEO, but his company is now in the hands of a board of directors elected by stockholders.

The boss' sexually charged advertising imagery, sometimes curated by Charney himself, helped to put the entrepreneur in a position of having to defend his relationships with young women who work at the factory and at some of the firm's 249 retail stores.

One such retail worker was 17-year-old Irene Morales, who claimed in a $250 million New York lawsuit against the company, ultimately thrown out of court, that she was "held prisoner" as a sex slave by Charney after she turned 18. Other sexual-harassment suits followed.

Allegations that Charney more recently leaked nude photos of Morales are one reason for his dismissal from American Apparel, according to some reports.

Charney has denied allegations of sexual misconduct on the job and, until last week, the company's board stood behind him.

The American Apparel founder has argued that his success, his liberal mores and his extraordinary love for his employees (he boasts of a "sweatshop-free" clothing factory downtown, providing living wages, paid holidays and perks including bus passes to free English classes) have made him vulnerable to unfair claims.

Whatever faults he might have, Charney is to American Apparel what Steve Jobs was to Apple. And remember, Jobs once was pushed out of his company too.

The question is whether investors are willing to stay the course with yet another fashion brand driven by business people in suits, or whether they believe Charney is the only way this L.A. brand has a chance to survive as a viable business.

Send feedback and tips to the author. Follow Dennis Romero on Twitter at @dennisjromero. Follow LA Weekly News on Twitter at @laweeklynews.

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