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Dov-charney There is a peculiar sort of schadenfreude surrounding the ongoing saga of American Apparel founder Dov Charney's unceremonious ejection from his company. Information is streaming from multiple sources but, unsurprisingly, little of it conflicts with the conventional assessment that Charney was booted because his legendary sexual misconduct showed no sign of abating and also because he was misusing company funds and, possibly most importantly, failing to reverse the poor performance of his company.

The most interesting bit of commentary (and there is a lot of it) comes from our friends at The Cut, who cleverly chose to interview five unnamed American Apparel employees at the store level, none of whom seem to be sad to see Charney removed. Sexy stories aside, they paint a picture of a shoddily run company suffering the consequences of Charney's micromanagement and whimsical hiring policies. We hear of poorly prepared shipments, pointless transfer orders and a poorly made and merchandised product line that is failing to resonate with customers. "We interact with people in the corporate office pretty frequently, and there are a lot of truly incompetent people," says a backstock associate. Another tells of erratic merchandise deliveries and inefficient transferring of product from store to store to store, also revealing that rather than having an online distribution center, internet orders seem to be fulfilled from the retail stores, creating more inconsistencies and potential for careless mistakes. Store managers complain of poor upkeep. "We didn’t have an alarm system at my store for like three months, which was kind of sketch. I would be worried if I had that much merchandise in a store," says one, and another points out that Charney's micromanaging tendencies kept him from dealing with larger, more pressing, systemic problems. "Whenever he comes to New York, everyone is super-scared because he’ll just stay stuff that’s like, 'Whoa'," says a sales associate, "But I think it will be better, to be honest. It can’t get any worse than this." When the stockpeople are rolling their eyes at the CEO's incompetence, you know that the problems go way beyond his inappropriate behavior.

Meanwhile, this particular story has the unique quality of being relevant in both hard business press outlets and lighter gossip sources, so there's plenty of news to go around. Buzzfeed has a copy of the actual letter delivered to Charney informing him of his termination and explicitly enumerating the reasons including a Breach of Fiduciary Duty, Violation of Company Policy and Misuse of Company Assets specifically, and noting that his behavior has degraded the company's reputation and therefore made it difficult to find adequate financing with him in charge. The Financial Times has the only interview with Charney, so far. “This is the year American Apparel fully recovered. This has to manifest itself to its full conclusion, with me there,” he tells them. “I think I will be back in my office before long. I will make this company happen with me still at the helm.” He is reported to be looking to combine his shares with those of supportive shareholders to subvert the board's decision in addition to pursuing his lawsuit demanding reinstatement. Major investors, however, do not seem interested in taking his side, and the company's stock prices immediately rose upon news of his firing, suggesting that the business world has been waiting to see him ousted. Today's report from WWD has newly appointed cochairman Allan Mayer promising that even without its original creative force, the company would remain true to its familiar aesthetic. “There is something at the core of the American Apparel brand that is slightly transgressive,” He says. “That is not to everybody’s taste — and sometimes it’s not to my personal taste — but it’s what the company is and we’re not going to change.”

Without question, there will be more coming on the 23 or so days until Charney's suspension becomes a termination. Stay tuned for more developments.

5 American Apparel Employees on Dov Charney’s Ousting By Katie Van Syckle (The Cut/NTMag)


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