American Apparel cuts all ties with founder Dov Charney

Ousted as CEO in June, the Canadian-born Charney founded American Apparel in 1998

LOS ANGELES — American Apparel has fired founder Dov Charney and named longtime fashion executive Paula Schneider to be its next CEO.

The Los Angeles-based company’s board voted to oust Charney as CEO in June, citing allegations of misconduct. He was put under suspension, but still served as a consultant to the company. American Apparel said Tuesday that it has terminated his position “for cause” after an internal investigation.

Schneider previously served as a senior executive at retail and clothing companies including Warnaco, Gores Group and BCBG Max Azria. She officially takes over the role January 5.

American Apparel has operated under two interim CEOs since Charney’s ouster, most recently Scott Brubaker, who will continue in that role through the end of the year.

American Apparel Inc., which Charney founded in 1998, manufactures clothes and sells them in 245 of its own retail stores in 20 countries and has about 10,000 employees.

Charney has been the subject of lawsuits that allege he had inappropriate sexual conduct with female employees. He has said he had consensual sexual relationships with workers.

American Apparel said Tuesday that a special committee of its board decided, based on the results of an internal investigation, that “it would not be appropriate for Mr. Charney to be reinstated as CEO or an officer or employee.”

Shares rose 5 cents, or 8.6 per cent, to 63 cents in after-hours trading. The stock closed up 3 cents at 58 cents on Tuesday, down 53 per cent this year.

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