Yesterday, American Apparel fired its founder and longtime CEO Dov Charney.
The move comes as a shock, because for years Charney has had voting control of his company's stock and he's successfully faced down a series of sexual harassment allegations — many of which turned out to be false or have no legal basis. (Charney famously gave the company an overtly sexual image: He was known to have girls in bikinis wash the factory roof.)
Allan Mayer, the company’s newly appointed cochairman, told The LA Times,"This is not easy, but we felt the need to do what we did for the sake of the company ... Our decision to do what we did was not the result of any problems with the company’s operations." He said the board launched an investigation into Charney's sex life earlier this year after "new information came to light."
In the beginning ...
American Apparel was started by Dov Charney while he attended Tufts in the late 1980s.
By 1997, the company moved from Charleston, South Carolina, to Los Angeles. In 2000, American Apparel moved into its current Los Angeles factory. In 2006, the company was sold for more than $380 million to Endeavor Acquisition Corp. in a shell transaction that let APP begin trading immediately as a public stock.
Charney stayed on and ran the company — until today.
In 2004, concerns about the sexual nature of the company's corporate culture emerged.
Charney gave an infamous interview with Claudine Ko, about the company, Charney, and the women around him.
Ko claimed Charney masturbated in front of her — multiple times.
What followed were a series of lawsuits from former employees, totaling nine by 2013, regarding sexual harassment, naked pictures, and more. In one of them, filed in 2011, a woman alleged Charney trapped her in his home as a sex slave.
But by the mid-2000s, sales were booming.
2008 was a very good year, until ...
... Charney called his CFO a "complete loser."
Ken Cieply resigned a few weeks later and the stock had one of its worst months in history. It would get temporary reprieve, but then suffer with the rest of the markets in the fall of that year.
By December, there were still reasons to celebrate a bit: rapid expansion, success in the U.K., domestic praise, and a great online strategy.
See the rest of the story at Business Insider