American Apparel officially fired founder and former CEO Dov Charney Tuesday and named his successor, Paula Schneider, in what seemed like an end to a saga that began in June.
But within hours of the announcement, at least 30 managers and director-level employees sent the board a letter protesting the decision.
The group, citing concern over American Apparel's future, wrote it was "alarmed to learn of the board's decision today to not reintegrate Dov into a leadership role in the company," and noted that Charney's removal "was made without consulting even one of us regarding the impact it could have on the company, its employees and shareholders." Charney, who was working as a paid consultant for American Apparel during an internal investigation that began in July, was fired from that position as part of Tuesday's announcement. He was suspended as CEO and chairman for "alleged misconduct and violations of company policy" in June.
Yet Charney himself "is what makes this thing tick," the group wrote. The employees suggested a scenario in which a new CEO "would be a supportive counterpart to Dov, who we feel should lead the creative vision, growth and sales strategy of the company." Dov, in this setup, would continue to visit factories and stores and work with employees "in the trenches." The letter, first reported on by Bloomberg News, was sent to BuzzFeed News on the condition of anonymity, and is included in full below.
Allan Mayer, co-chairman of the board, acknowledged in an e-mail that the board received the letter but declined to comment on it.
Schneider, a retail veteran who's worked at Big Strike, BCBG Max Azria, and Laundry by Shelli Segal, is set to be the new CEO of the company starting Jan. 5.
Charney was served with a termination letter in June for a long list of reasons including: breaching his fiduciary duty, violating company policy, sexual harassment, and misusing corporate assets, according to the letter, which was obtained by BuzzFeed News. In news reports following his dismissal, Charney proclaimed his innocence and called the board's accusations baseless. He remains the company's biggest shareholder. At less than $1 a share, the stock is well off its high of $15.80 in 2007.
Charney said in an e-mailed statement Tuesday that he's "proud of what I created at American Apparel" and "confident that, as its largest shareholder, I will have a strong relationship with the company in the years ahead."
"Naturally, I am disappointed with the circumstances and my over 25 years of deep passion and commitment for American Apparel will always be the core DNA of the company," he added in the statement.
A source close to the company told BuzzFeed News that the board is anticipating legal action from him.
Contact Sapna Maheshwari at email@example.com.
Sapna Maheshwari is a business reporter for BuzzFeed News and is based in New York. Maheshwari reports on retail and e-commerce.
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