The Emperor has no Apparel
I used to walk past the skinny mannequins of an American Apparel storefront every day on the way to work. My wife stopped in once, but told me the clothing was for the very young with disposable income. Later I heard the rumors about the founder hitting on the help, but nothing seemed to come of it. Until now.
In, The Road to Dov Charney’s Ouster at American Apparel, the NY Times makes it clear that sagging profits doomed him, not predatory behavior:
“We were not blind and deaf to all the allegations and the newspaper stories,” [Allan Mayer, a board member who is now co-chairman] continued. “But you can’t take an action this serious simply on the basis of rumors and allegations.”
Interviews with nearly a dozen current and former high-level company insiders depict a recent cascade of events that essentially forced the hand of a traditionally sympathetic board. Mr. Charney’s coarse behavior was well known, and apparently tolerated, as evidenced by how unscathed he remained despite a parade of harassment lawsuits that trailed him for years.
But the company’s financial situation had grown precarious: Interest rates on some loans had shot up to as high as 20 percent, last year the retailer posted a loss of $106 million, and the stock price had plummeted to a low of 47 cents a share this spring from $15 in 2007.
With a great deal of help from the Times and other media, Woody Allen seems to have survived the accusations of his grown, adopted children, Dylan and Ronan. With the help of NY Magazine, photographer Terry Richardson may well survive the accusations of several former models. But Allen and Richardson keep making money. Now that he isn’t raking in the cash, Charney does not seem to have any powerful media allies.