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American Apparel fires founder Dov Charney | American Apparel fires founder Dov Charney |
(about 1 hour later) | |
The clothing and accessories retailer American | The clothing and accessories retailer American |
Apparel Inc has ousted its controversial founder Dov Charney as chairman and moved to fire him as chief executive and president | Apparel Inc has ousted its controversial founder Dov Charney as chairman and moved to fire him as chief executive and president |
amid an ongoing investigation into alleged misconduct. | amid an ongoing investigation into alleged misconduct. |
Charney, who has been repeatedly cited in sexual harassment | |
lawsuits, would be terminated for cause after a contractual 30-day cure | lawsuits, would be terminated for cause after a contractual 30-day cure |
period, the Los Angeles-based company said in a statement late on | period, the Los Angeles-based company said in a statement late on |
Wednesday. | Wednesday. |
The company, known for its racy advertising and bright | The company, known for its racy advertising and bright |
"Made-In-America" clothes, said its chief financial officer, John Luttrell, would act as interim | "Made-In-America" clothes, said its chief financial officer, John Luttrell, would act as interim |
chief executive during the search for a permanent | chief executive during the search for a permanent |
CEO. The retailer also appointed Allan Mayer and David Danziger as | CEO. The retailer also appointed Allan Mayer and David Danziger as |
co-chairmen. | co-chairmen. |
"We take no joy in this but the board felt it was the right thing to do," Mayer said in a statement. | "We take no joy in this but the board felt it was the right thing to do," Mayer said in a statement. |
Charney, 45, founded American Apparel's predecessor companies in | Charney, 45, founded American Apparel's predecessor companies in |
1989 and has been in charge since 2007 when the company went public. | 1989 and has been in charge since 2007 when the company went public. |
American Apparel spokesman Terry Fahn declined to provide additional | American Apparel spokesman Terry Fahn declined to provide additional |
details. Charney did not immediately respond to calls and emails | details. Charney did not immediately respond to calls and emails |
seeking comment. | seeking comment. |
The company, which is struggling with weak sales and heavy debt, | The company, which is struggling with weak sales and heavy debt, |
said the management changes may have triggered a default under its | said the management changes may have triggered a default under its |
credit agreements, adding that it would be in discussions with its | credit agreements, adding that it would be in discussions with its |
lenders for a waiver of the default. | lenders for a waiver of the default. |
In February the company engaged restructuring advisers after it | In February the company engaged restructuring advisers after it |
had reached $240m in debt and reportedly came close to breaching loan | had reached $240m in debt and reportedly came close to breaching loan |
covenants – debt terms designed to protect its lenders. | covenants – debt terms designed to protect its lenders. |
The company's shares, which have lost more than two-thirds of their | The company's shares, which have lost more than two-thirds of their |
value over the past year, closed at 64 cents on the American Stock | value over the past year, closed at 64 cents on the American Stock |
Exchange on Wednesday. | Exchange on Wednesday. |
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