Ousted American Apparel CEO Dov Charney has worked closely with investment firm Standard General to increase his stake in the company from 27% to 43%.
But the deal between them includes an agreement that Charney essentially cedes his authority to Standard General, which is in the midst of discussions with the retailer’s board.
The firm plans to make operational and management changes to the retailer, but both the firm and Charney say that retaining the retailer’s manufacturing in the United States and paying workers good wages remain top priorities.
Dov Charney has never been shy about his liberal politics; he has long needled his retail competition for underpaying garment workers in sweatshop conditions. It looks like he is willing to give up personal power to ensure that American Apparel retains its dedication to making its clothing Stateside and paying its more-than-average wages.
The deal between Charney and investment firm Standard General is startling, but could be the best thing to happen to the struggling retailer, which is loaded with debt. Standard General has already begun work on figuring out what the retailer needs operationally, and in terms of management.