Ex-CEO Dov Charney seeks to return to American Apparel
A shopper makes her way into an American Apparel store on Melrose Avenue.
Former American Apparel Inc. Chief Executive Dov Charney, fired last year after allegations of misconduct, is taking steps to return to the Los Angeles retailer he founded.
Charney announced Friday that he is “exploring plans with investors and industry executives in an effort to develop a value-maximizing solution” for the struggling retailer. It is the first public step he’s taken to regain control since the struggling firm filed for bankruptcy protection in October.
Charney is working with financial advisory firm Cardinal Advisors to evaluate “strategic alternatives” for American Apparel, according to a news release.
Charney declined to comment, as did Cardinal Advisors. But the announcement said Charney was “confident” that he, along with industry leaders and investors, could turn around the company’s fortunes.
In a statement, American Apparel said Charney had expressed an interest in acquiring the company, but that there was “currently no transaction for the board to consider.”
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Since the board pushed out Charney in June 2014, the company has continued to struggle, filing for bankruptcy two months ago. Charney, who owns about 40% of the company’s stock, was fired after an investigation into alleged inappropriate behavior and misuse of company funds.
Charney has denied the allegations.
American Apparel’s restructuring agreement would take the company private and hand nearly 100% control to its largest bondholders.
If approved by the Bankruptcy Court, the deal would also force out most of American Apparel’s shareholders, including Charney. Bankruptcy experts have said Charney has the ability to slow the process in court but has little chance of stopping it.
Twitter: @khouriandrew
Times staff writer Shan Li contributed to this report.
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