Two American Apparel board members resign
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Two American Apparel Inc. board members resigned over the weekend, Chief Executive Dov Charney said Tuesday.
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 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 to not file for Chapter 11 bankruptcy protection in the spring during a liquidity crisis, as reported by the New York Post, which first reported the director resignations.
‘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 and resigned.’
Charney has repeatedly rejected talk of bankruptcy and did so again on Tuesday saying, ‘it would have never happened.’ He said the company’s recent financial troubles stemmed mainly from two external issues: higher cotton prices and a labor shortage due to the forced layoffs of hundreds of workers last year following an immigration investigation.
‘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 but Charney hinted that the company may be looking for additional financing. He said another $6 million to $8 million would help stabilize the business and an additional $10 million would help the company open new stores. Charney has been especially interested in expanding the company’s presence in Asia, where he has been for nearly a month now.
American Apparel now has six board members, including Charney, who is chairman. He said the company would look to fill a seventh spot at a later date.
The two newest directors are David Danziger, a chartered accountant and partner at MSCM, an audit and accounting firm 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.
-- Andrea Chang