Boston, MA 06/20/2014 (wallstreetpr) – A chain of retail store operator of branded fashions basic apparel and accessories, American Apparel Inc. (NYSEMKT:APP) is likely to face tougher days in the coming weeks or months following the firing of Dov Charney as its chairman and CEO of the company. The company’s interim chairman himself predicts a tough fight in the cards with the fired chairman.
Terminates Dov Charney
The company had disclosed that its board had voted Dov Charney out as chairman and expressed its opinion of terminating his services as president and CEO after a customary 30-day notice period as per the terms of the employment agreement. Till then, he has been placed under suspension for cause.
The replacement of Charney as chairman and his termination of services are attributed to his misconduct for which investigation has been going on by its five independent directors. The company felt that his actions were detrimental to it. Reuters reported that Charney has been charged with sexual harassment lawsuits.
American Apparel Inc (NYSEMKT:APP)’s board has named Allan Mayer and Devid Danziger as the company’s co-Chairman with immediate effect in place of Charney. It had also named its current chief financial officer or CFO John Luttrell as its interim CEO as well. Luttrell had earlier served Cost Plus, The Wet Seal, and Old Navy as CFOs.
The company would also seek to request Charney to resign from the board as a member to take effect from his termination of services. The co-chairman Mayer said that the company had acted in the right way and that there was nothing to take joy on this.
American Apparel disclosed that its board would identify candidates through a search firm for the permanent CEO position and its initial discussions with the recruitment firm provided impressive successors list.
American Apparel Inc (NYSEMKT:APP) had also indicated its commitment to its philosophy of made in USA Manufacturing and sweatshop-free. It expects a new chapter in the company’s history.
Dov Charney to Hit Back
The ousted chairman is holding 27% of the stake in American Apparel, and it was his baby. Therefore, the company expects him to fight back hard to wrest control the retailer. However, the company had indicated its preparedness to face any eventuality.