Less than a month after the company he founded moved to fire him over “alleged misconduct,” former American Apparel CEO Dov Charney has scored a major coup in his mission to reclaim his company.
Last week, Charney moved to increase his stake in the company from 27 percent to a whopping 43 percent. What does this mean? Well, the more stake you have, the more influence you have—and if Charney could regain a controlling stake in the company, he’d be able to influence things like the board of directors, who’ve been pushing to remove him completely from the company.
Now, it looks like Charney, American Apparel, and investment firm Standard General have agreed to a deal in which Standard General will inject $25 million into American Apparel’s (struggling) business—a serious lifeline for the company, which has been facing a lot of issues with its finances. In addition, the deal will include a restructuring of the board—another victory for Charney, who’d pushed for changes to the board—and a commitment to keep manufacturing in the states. Furthermore, a committee of independent directors will apparently be appointed to oversee an investigation into Charney’s “alleged misconduct” to see if he can be reinstated into the company in a formal way.
Most importantly, Charney has a job again. Granted, his title isn’t CEO—he’ll be a consultant—and he won’t be on the board, but he will receive a base salary and will (if trends persist) influence the future at the company he founded. Considering how bad things looked for him a few weeks ago, we’d say this is a serious improvement on things.
What do you think, does Charney deserve a place at American Apparel?