In a Wednesday night press release, American Apparel announced that its board of directors has voted to fire President and CEO Dov Charney “for cause.”
According to board member Allan Mayer, the decision to fire Charney stemmed from “an ongoing investigation into alleged misconduct.” The board voted unanimously to oust him.
“We take no joy in this, but the Board felt it was the right thing to do,” Mayer said in a statement. “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.”
The Los Angeles Times has some details about what that alleged misconduct may be:
According to board member Allan Mayer, the decision to fire Charney stemmed from “an ongoing investigation into alleged misconduct.” The board voted unanimously to oust him.
“We take no joy in this, but the Board felt it was the right thing to do,” Mayer said in a statement. “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.”
The Los Angeles Times has some details about what that alleged misconduct may be:
In 2011, American Apparel lashed out when four female former employees filed a sexual harassment suit. At the time, the company told The Times that the four women were friends who were colluding to "shake down" Charney and the company for money and that it had "voluminous evidence" to prove that the allegations were false.
In 2012, Charney was accused in a wrongful termination suit of choking and rubbing dirt in the face of a former store manager in Malibu. Charney also was accused of calling the employee "a wannabe Jew" and a "fag" and asked if he was sleeping with a certain girl. The company denied the allegations.
Charney reportedly hung up when a Times reporter attempted to contact him for comment.
John Luttrell, the company’s current chief financial officer, will serve as interim CEO while the board seeks a permanent chief executive.
Though news of a vote ousting the company’s founder after years of accusations is PR problem enough, the release from American Apparel adds this tidbit: “As a result of the management changes, the Company may have been deemed to have triggered an event of default under its credit agreements and will be in discussions with its lenders for a waiver of the default.”
What do you think, PR Daily readers? This is certainly an immediate PR puzzle, but will it serve American Apparel in the long run to have voted Charney out?
John Luttrell, the company’s current chief financial officer, will serve as interim CEO while the board seeks a permanent chief executive.
Though news of a vote ousting the company’s founder after years of accusations is PR problem enough, the release from American Apparel adds this tidbit: “As a result of the management changes, the Company may have been deemed to have triggered an event of default under its credit agreements and will be in discussions with its lenders for a waiver of the default.”
What do you think, PR Daily readers? This is certainly an immediate PR puzzle, but will it serve American Apparel in the long run to have voted Charney out?
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