Dov Charney
Dov Charney is a Canadian businessman. He is best known for founding American Apparel, where he served as the CEO from 1989 until 2014. He later founded Los Angeles Apparel. He is also an advocate for immigration reform in the United States.
Early life
Charney was born in Montreal, Quebec. His father is an architect, and his mother an artist. Charney is a nephew of architect Moshe Safdie. He attended Choate Rosemary Hall, a private boarding school in Connecticut and St. George's School of Montreal. According to Charney, he was heavily influenced by both Montreal culture and his own Jewish heritage.American Apparel
Charney began making basic T-shirts under the American Apparel brand as early as 1991. By 1997, he moved all manufacturing into an factory located in downtown Los Angeles. American Apparel products were marketed towards "young metropolitan adults." The basic, logo-free branding appealed to younger consumers wary of corporate branding. Eventually, Charney opened over 180 American Apparel retail locations in a total of 13 countries: United States, Canada, England, France, Germany, Israel, Italy, Japan, Korea, Mexico, the Netherlands, Sweden and Switzerland. There were also distribution facilities in Montreal, Quebec, Canada, and Düsseldorf, Germany.American Apparel under Charney's leadership was known for its simple and provocative ads, which rarely used professional models and whom were often chosen personally by Charney from local hangouts and stores. He shot many of the advertisements himself. His advertising was criticized for featuring young, even teenage, models in sexually provocative poses. However, it was also lauded for honesty and lack of airbrushing.
In 2005, Charney won the "Marketing Excellence Award" in the LA Fashion Awards. Charney was also named Retailer of the Year at the Michael Awards in 2008. The award had previously been awarded to Calvin Klein and Oscar de la Renta.
In December 2006, American Apparel entered into a reverse merger agreement valued at $360 million with the special purpose acquisition company Endeavor Acquisition as a way of taking the company public.
Dismissal
American Apparel publicly suspended Charney on 18 June 2014, stating that they would terminate him for cause in 30 days. The company's board claimed at the time that it had "new information" which led it to fire Charney. New co-chairman Allan Mayer said: "We have heard for years allegations and rumors in newspaper stories that were not sufficient to take action. But what came to our attention was not allegations and rumors but established fact." He declined to elaborate at that time. The board had just begun an investigation into how Charney responded to a 2011 lawsuit by a former employee who claimed he had held her against her will as a "sex slave", a suit settled in arbitration.Two days later, a company insider posted a "confession" to the social network Whisper asserting that the reasons for Charney's dismissal were "purely financial... Everything else is bullshit. The board has nothing new." BuzzFeed got in touch with the poster through Whisper and was able to obtain the board's dismissal letter to Charney. It repeated the board's earlier allegation that he had allowed a subordinate to pose as Irene Morales on a blog and make sexually provocative posts to him, which had apparently led to major punitive damages awarded to Morales by the arbitrator, calling this a breach of his fiduciary duty. Further in that vein, the board said, it had learned of an attempt to possibly suborn perjury in a "pending litigation matter". The letter also charged Charney with misusing corporate assets for personal gain, such as paying lucrative severance packages, bonuses and salary increases in exchange for silence from putative accusers as well as using corporate apartments himself and buying travel for family members with company funds, violating company policy by refusing to attend mandatory sexual harassment training sessions and interrupting them when others attended.
As a result of Charney's behaviour the company's costs had increased unacceptably. "The company's employment practices liability insurance retention has grown to $1 million from $350,000... the premiums for this insurance are well outside of industry standards." His reputation had also hurt American Apparel's financing, as "many financing sources have refused to become involved with American Apparel as long as you remain involved with the company" and those that did had imposed "a significant premium for that financing in significant part because of your conduct." It gave him the 30-day suspension to "effect a cure" for these issues. Charney demanded the board reinstate him, threatening to sue.
In December 2014, Charney was terminated as a Chief Executive Officer after months of suspension. He was replaced by Paula Schneider, president of ESP Group Ltd, company of brands like English Laundry, on 5 January 2015. In December 2014, Charney told Bloomberg Businessweek he was down to his last $100,000 and that he was sleeping on a friend's couch in Manhattan. Following his suspension as CEO in the summer of 2014, Charney teamed up with the Standard General hedge fund to buy stocks of the company to attempt a takeover.
In 2016, American Apparel board dismissed a $300 million offer from Hagan Group that pushed for Charney's comeback.
Los Angeles Apparel
In 2016, Charney founded Los Angeles Apparel. Following the launch, his new apparel company was frequently compared to American Apparel, with a number of reporters stating the similarities between the strategies of the two companies. He opened Los Angeles Apparel's first factory in South Central Los Angeles, with aims of replicating the successes he experienced in the 1990s with supplying wholesale clothing. The strategy was similar to that he deployed while expanding American Apparel. This included manufacturing all the garments in the US to keep lead times low and offer better completion times than overseas competitors. The company grew to over 350 staff during the second year of operation. During an interview with Bloomberg, Charney drew comparisons to the growth he experienced with American Apparel calling it the equivalent of "year eight". Charney expected the fashion line to grow to $20 million in revenue by 2018.Following the outbreak of the COVID-19 pandemic in the United States, Charney repurposed his business operations to help increased demand for PPE. According to the Los Angeles Times, Charney spotted shortages as early as February and this is when his apparel company began to consider manufacturing face masks.
Charney was interviewed in March 2020 by a number of media outlets, speaking about his desire to turn Los Angeles Apparel into a medical equipment manufacturer during the pandemic. Los Angeles Apparel then began manufacturing face masks and medical gowns at the facility in South Central. Charney told the New York Times that he aimed to create 300,000 masks and 50,000 gowns each week. Los Angeles Apparel launched the new face mask in over a dozen different colors. In an interview, Charney said he was "losing money on the venture," as he was giving many of them away. This included donating large numbers to key workers in healthcare and law enforcement in LA, Seattle, New York City and Las Vegas.
Activism
Under Charney's leadership, American Apparel took a leading role in the promotion of a number of prominent social causes.Legalize LA
Legalize LA was an immigration reform campaign conceived by Charney and promoted by American Apparel beginning in 2004. The campaign featured billboards and full-page ads in national publications as well as t-shirts sold in retail locations emblazoned with the words "Legalize LA." Proceeds from the sale of the shirts were donated to immigration reform advocacy groups. The campaign called for the overhaul of immigration laws so as to create a legal path for undocumented workers to gain citizenship in the United States.Legalize Gay
In November 2008, after the passing of Proposition 8, which banned same-sex marriages in California, Dov Charney and American Apparel created "Legalize Gay" T-shirts to hand out to protesters at rallies. The positive reaction led American Apparel to sell the same shirts in stores and online.Factory conditions
In an interview with Vice.tv, Charney spoke out against the poor treatment of fashion workers in developing countries and refers to the practices as "slave labor" and "death trap manufacturing". Charney proposed a "Global Garment Workers Minimum Wage" and discussed in detail many of the inner workings of the modern fast fashion industry practices that creates dangerous factory conditions and disasters like the 2013 Savar building collapse on May 13, which had the death toll of 1,127 and 2,500 injured people who were rescued from the building alive.Controversy
Charney has been the subject of several sexual harassment lawsuits, at least five since the mid-2000s, all of which were settled, dismissed, or remanded to private arbitration. He has never been found to have committed sexual harassment. Charney's lawyer, Keith Fink, told Business Insider that, "In many instances, cases were defeated or dismissed. In other instances, cases were settled because the insurance company whose only goal is to save total dollars wanted to stop the legal bleeding on these cases."Charney maintained his innocence, telling CNBC that "allegations that I acted improperly at any time are completely a fiction." The company and independent media outlets publicly accused lawyers in the lawsuits against American Apparel of extortion and of "shaking the company down."
In 2004, Claudine Ko of Jane magazine published an essay narrating that he began masturbating in front of her while she was interviewing him. The article's publication brought extensive press to the company and Charney, who later responded that he believed that the acts had been done consensually, in private and outside the article's bounds.