Private label apparel manufacturer Delta Galil Industries on Tuesday announced the appointment of former American Apparel CEO Paula Schneider as CEO of DG Premium Brands, responsible for 7 For All Mankind, Splendid and Ella Moss, according to a company press release.
Schneider will replace Susan Kellogg, who will remain with the company as a consultant until the year's end. Israeli-based Delta Galil acquired struggling contemporary premium brands from VF Corp. in June for $120 million. That business at VF saw sales of $344 million last year, the lowest margins in its portfolio at 2.8% of its total revenue in 2015.
Schneider, who left her post as American Apparel CEO on Oct. 3, spoke at Fortune magazine’s Most Powerful Women Summit, detailing her experience at American Apparel and looking forward to her job with the three still-popular brands.
Paula Schneider, who took the reins as American Apparel's CEO in the midst of a brutal dispute with its founder Dov Charney in 2014, left the retailer only a few weeks ago, and general counsel and Chief Administrative Officer Chelsea Grayson was immediately tapped to take over the hot seat.
During Schneider's 18 months at the helm, she spearheaded a turnaround plan to curb years of falling sales and accumulating debt, but her efforts never really took off and resulted in a rise of employee protests. American Apparel emerged as a private company from bankruptcy in February. By the end of September, multiple news outlets had reported the retailer was actively seeking a buyer. Over the last several months, Schneider oversaw massive layoffs and the possibility of a sale, which many feared would uproot the L.A.-based retailer and send it overseas, a move that Charney adamantly opposed.
In a video interview during Fortune magazine’s Most Powerful Women Summit, Schneider pushed back against the backlash from employees — including death threats. Workers didn't understand that she never intended to move the company's operations overseas, but that the company couldn't afford the overtime pay it consistently offered, she said.
She characterized her first few months at American Apparel as “stressful,” to put it simply. “There was a life size piñata with my picture on it, my face, and it was actually probably the turning point,” she said. “It was extremely disturbing because it looks like you’re beating up on a woman."
Schneider said she made up her mind to leave the retailer after the board decided to sell the company. Investment bank Houlihan Lokey has been hired to explore a sale of the company, two sources told the Los Angeles Times, and Women’s Wear Daily reported that investor Ron Burkle’s Yucaipa Cos. has probed the embattled retailer's finances. From her view, the retailer is in relatively good shape and she believes the turnaround plan she put in place seems to finally be paying off — but only time will tell if the retailer can bounce back.
For now, Schneider said she is looking forward to her time at DG Premium Brands. “It’s beautiful product,” she said during the Fortune interview, “and I need you all to go shopping.”