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.
December 16, 2014 To the Board of Directors of American Apparel:We are a united group of management and director-level employees of American Apparel. We are appealing to you today because we are very concerned about the future of a company that we care deeply for.Some of us have been with American Apparel since its first days in Los Angeles in 1998 and many others for over a decade. When we walk through the remarkable and unparalleled "sweatshop-free, vertically-integrated" factory in downtown LA and when we consider the global impact the brand has made on modern culture, we can't help but think about how it came to be. Each of us can tell countless, sometimes unbelievable stories of how, against all odds, we cobbled things together to help build a completely unique, globally recognized brand – and the common thread in all of our accounts is Dov Charney. In some stories he drives us crazy while in others he mentors and encourages us, but one thing is undisputable - his vision, drive, determination and persistence has been the momentum behind every major progression this company has made since its inception in 1986. He brings energy, imagination and authenticity that no other single person can possibly come close to and it's motivational and inspiring to us all. Plainly put, Dov is what makes this thing tick.We were alarmed to learn of the board's decision today to not reintegrate Dov into a leadership role in the company. This decision was made without consulting even one of us regarding the impact it could have on the company, its employees and shareholders. We are the people in the day-to-day trenches that know what this company needs in order to reach its immediate and long-term potential and to fulfill its responsibilities to its shareholders.We believe the best-case scenario for the future of American Apparel is to put a strong CEO in place that can focus on structure, efficiency and optimization of the daily operations of the business. The vision of the CEO should be in line with that of the global workforce as well as the shareholders of American Apparel. Also, the CEO would be a supportive counterpart to Dov, who we feel should lead the creative vision, growth and sales strategy of the company. It's not about the title he has, rather it's about respecting the hard work that he continues to contribute and allowing the company to benefit from his strengths. Most importantly, he needs to be in the factory, in the stores and in the trenches with us all. We understand and agree that there is a need for a constructive and pivotal evolution within the organization. We aren't holding onto the past. We are eagerly looking towards the best possible future for this extraordinary company and we will continue to use our best judgment to protect and grow the business.The turnaround and subsequent success of American Apparel has the opportunity to be a brilliantly triumphant story and we believe Dov, its visionary founder, our friend and leader, should be a decisive part of it.
Contact Sapna Maheshwari at email@example.com.