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American Apparel Inc (NYSEMKT:APP) Sends CEO Packing

Boston, MA 06/19/2014 (wallstreetpr) – American Apparel Inc (NYSEMKT:APP) has acted without fear or favor to send home its founder, president and chief executive officer. The going had become unbearable for the company that cutting ties with the CEO seemed to be the textbook thing to do at this juncture.

The company, which faces falling sales and ballooning debt, has moved to oust President and CEO Dov Charney.  The board voted 5 to 0 to oust the CEO, who, therefore, becomes suspended immediately while awaiting further action after 30 days have elapsed. The further action means firing as the board does not appear ready to readmit him as the face of the company.

According to a source, Charney was surprised by the move taken by his colleague on the board. The source also speculated that Charney would fight for his position, but chances are remote for his success.

Misconduct informs impeachment

The suspension and the expected firing of Charney are not linked to the failing operations of the business, according to a statement released by the company, rather, misconduct cost the CEO his job, and he might never get it back.

There have been widespread and damaging accusations against Charney, many of the accusations hinged on personal conduct with women. Although the board appeared to have acted too late because such accusations have been leveled against the CEO for a long time now, it said removing the CEO required compelling evidence that apparently surfaced recently.

Interim team

Following the ouster of Charney, the board appointed David Danziger and Allan Mayer as co-chairmen on an interim capacity. Chief Financial Officer, John Luttrell, steps in as interim CEO of American Apparel Inc (NYSEMKT:APP).

In a statement announcing the ouster of the CEO, Mayer noted that the decision was not easy but necessary.

Putting the house in order

In a bold step to redeem its image, American Apparel Inc (NYSEMKT:APP) now looks forward to repairing its balance sheet. The company has had wanting performance characterized by poor sales amid bulging debt and expenses. The company suffered a loss of $106.3 million in 2013, which was bigger than a loss of $37.3 million in the prior year.

Boston, MA 06/19/2014 (wallstreetpr) – American Apparel Inc (NYSEMKT:APP) has acted without fear or favor to send home its founder, president and chief executive officer. The going had become unbearable for the company that cutting ties with the CEO seemed to be the textbook thing to do at this juncture.

 

The company, which faces falling sales and ballooning debt, has moved to oust President and CEO Dov Charney.  The board voted 5 to 0 to oust the CEO, who, therefore, becomes suspended immediately while awaiting further action after 30 days have elapsed. The further action means firing as the board does not appear ready to readmit him as the face of the company.

 

According to a source, Charney was surprised by the move taken by his colleague on the board. The source also speculated that Charney would fight for his position, but chances are remote for his success.

Misconduct informs impeachment

The suspension and the expected firing of Charney are not linked to the failing operations of the business, according to a statement released by the company, rather, misconduct cost the CEO his job, and he might never get it back.

There have been widespread and damaging accusations against Charney, many of the accusations hinged on personal conduct with women. Although the board appeared to have acted too late because such accusations have been leveled against the CEO for a long time now, it said removing the CEO required compelling evidence that apparently surfaced recently.

Interim team

Following the ouster of Charney, the board appointed David Danziger and Allan Mayer as co-chairmen on an interim capacity. Chief Financial Officer, John Luttrell, steps in as interim CEO of American Apparel Inc (NYSEMKT:APP).

In a statement announcing the ouster of the CEO, Mayer noted that the decision was not easy but necessary.

Putting the house in order

In a bold step to redeem its image, American Apparel Inc (NYSEMKT:APP) now looks forward to repairing its balance sheet. The company has had wanting performance characterized by poor sales amid bulging debt and expenses. The company suffered a loss of $106.3 million in 2013, which was bigger than a loss of $37.3 million in the prior year.

Published by Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email ([email protected]) or his Google+ page (https://plus.google.com/u/0/116608759701551457422).



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