He's a polarizing figure, one who's been accused of sexual harassment and mismanaging the finances of one of the most influential fashion brands of the last 10 years. Dov Charney also started American Apparel in a dorm room, created its hipster ethos, supported immigrant labor as part of the brand's DNA, and even came out in favor of same-sex marriage before it was a hot-button topic in California.
Yet, as he's grown American Apparel from a t-shirt enterprise to a 280-store juggernaut based in downtown, some are wondering if Charney should step down as CEO.
The company is being investigated by some shareholders and sued by others as its stock price has plummeted to around 70 cents a share, the New York Stock Exchange has essentially warned it could be kicked out, and the U.S. Attorney's Office in New York wants to know why American Apparel can't hold on to an auditor. One business expert says it's time for Charney to let his baby go.
Business journalist Mark Lacter said on KPCC (89.3 FM) Tuesday afternoon that the clothing maker has a brand that's so strong it might be able to survive its financial turmoil … sans the eccentric Charney:
The one step that could really help is bringing in a new chief executive to replace Dov Charney, the controversial founder of the company. Now, Charney is truly a success story, but like a lot of entrepreneurs he's not been able to transition from a small business to one that generates more than half a billion dollars in sales (that's a big transition), and also like a lot of entrepreneurs, he simply refuses to give up the reins. As long as he's running the show, investors are likely to steer clear.