2 American Apparel board members resign
???Two American Apparel Inc. board members have resigned, Chief Executive Dov Charney said.
The move was expected after the Los Angeles clothing maker reported last week that it had appointed two new board members, one of them effective immediately, the other effective “upon a future board vacancy.”
Charney denied speculation that the two outgoing directors, Mark Samson and Mark Thornton, had been forced out because they disagreed with the company’s decision not to file for Chapter 11 bankruptcy protection in the spring during a liquidity crisis.
In a regulatory filing Tuesday, American Apparel said the departures “were not due to any disagreement with the company on any matter relating to the company’s operations, policies or practices.”
“It happens. I appreciate everything they did and I wish them the best,” Charney said in a phone call from Tokyo, where he has been traveling on business. “We ended on good terms. They’re good guys; we had to make some changes and they agreed.”
Charney has repeatedly disputed talk of bankruptcy, and did so again Tuesday, saying, “It would have never happened.” He said the company’s recent financial troubles stemmed mainly from two issues: higher cotton prices and a labor shortage due to the layoffs and resignations of more than 2,500 workers last year after an immigration inspection.
“Those were one-time events. You just have to normalize those effects out of the long-term business trajectory,” he said. “Chapter 11 would have been inappropriate for our business.”
American Apparel received a $15-million lifeline in the spring from a group of Canadian investors, and Charney, who is board chairman, hinted that the company might be looking for additional financing.
He said that an additional $6 million to $8 million would help stabilize the business and that $10 million on top of that amount would help the company open new stores.
The two newest directors are David Danziger, a chartered accountant and partner at MSCM, an audit and accounting firm based in Toronto, and Marvin Igelman, most recently a director and chief strategy officer at Poynt Corp., a Canadian company that offers mobile location-based search services.
