American Apparel has finally said farewell to its founder and former chief executive Dov Charney, and appointed its first female chief executive in his place.
The clothing brand first tried to push Charney out of the door back in June after an internal investigation found that his well-documented behavioural issues threatened to undermine the business.
But after Charney, who has had a number of sexual harassment lawsuits filed against him, threatened to sue the company for what he called an “illegitimate” investigation, he was brought back as a “consultant” while an independent inquiry got to work.
It came to pretty much the same conclusion: though Charney has never been found guilty of sexual harassment, his conduct is nevertheless bad for business.
In the original findings it was alleged he had engaged in sexual harassment of company employees, misused company funds to both cover up his misdeeds and pay for personal expenses, and made racist remarks to his employees (among other unsavoury acts).
The letter of termination told him:
The resources American Apparel had to dedicate to defend the numerous lawsuits resulting from your conduct, and the loss of critical, qualified company employees as a result of your misconduct are also costs that cannot be overlooked.Indeed, many financing sources have refused to become involved with American Apparel as long as you remain involved with the Company.
From 5 January, Charney will be replaced by Paula Schneider as chief executive. Schneider has a wealth of experience in working with global fashion brands including Warnaco, Gores Group and BCBG Max Azria.
In commenting on Charney’s official dismissal, co-chairman of the board Allan Mayer said: “We’re pleased that what we set out to do last spring - namely, to ensure that American Apparel had the right leadership - has been accomplished.”