American Apparel founder and former CEO Dov Charney is working with investment bank Cardinal Advisors LLC to explore a bid for the struggling company. American Apparel told Reuters that Charney had submitted an “indication of interest.”
Charney was ousted late last year as CEO and chairman after a dramatic series of moves over the summer and into the fall of 2014.
An American Apparel spokesperson emailed Retail Dive with the following statement: "We can confirm that there is currently no transaction to consider and that Mr. Charney has submitted nothing more than an indication of interest. American apparel evaluates all indications of interest consistently, and in the ordinary course."
American Apparel has a major problem. And despite a summer full of drama last year and seemingly never-ending litigation, it hasn’t really been Dov Charney. Until now, perhaps.
The big problem at American Apparel these days is more that its target demographic, young women in their teens and maybe into their 30s, have moved on from the retailer’s distinct eighties and nineties vibe.
If Charney manages to take back his company—something that would likely not surprise too many people—it’s hard to know if he’s actually the one to bring back the excitement that he arguably infused the brand with in the first place.
For one thing, the sex-based marketing, plus rumors of sexual harassment behavior and other crass antics by Charney, got both stale and creepy, to the point of being lampooned on Saturday Night Live (and rejected by the company’s board). These days, with feminism in and misogyny out, Charney’s approach to marketing just looks crude. And because that was American Apparel’s approach for so long, it has also become tired.
To be fair, one of Charney’s long-standing hallmarks of his brand is his dedication to American-made apparel and fair treatment of his Los Angeles-based workers. (Many have stayed loyal to him, in fact.)
But even that may require some finessing, with a need to possibly bump up its quality or the uniqueness of its designs.
In December, retail veteran Paula Schneider was tapped to succeed Charney. But the company has been distracted by ongoing litigation with Charney and filed for bankruptcy protection last month. The company has also been delisted by the New York Stock Exchange.