The battle for American Apparel Inc. might be just about to boil over.
While most of the recent action has come from ousted founder Dov Charney’s rush to add to his stake — late Monday he revealed he had boosted his stake; he now controls 43 percent of the company’s stock — additional details might come out of the investigation that led to his firing.
Someone familiar with the situation said the probe is ongoing and that indications are the results will be “of interest to everyone involved.” Those results are expected in “a matter of weeks and maybe even a matter of days,” the source told WWD.
Law firm Jones Day and FTI Consulting have been helping the board examine Charney’s colorful tenure as American Apparel’s chief executive officer. When he was fired two weeks ago, the board said he failed to prevent defamatory blog posts concerning a former employee and signed off on significant severance payments for former employees to shield himself from liability.
But that just begins to touch on the characteristics that built his reputation.
Charney crafted the company’s racy marketing and is well known for his sexually charged lifestyle. He has been repeatedly sued for sexual harassment, but the allegations were settled or dismissed.
Throughout it all, he has denied wrongdoing and is fighting his termination in arbitration and is said to be seeking $23 million to $25 million for wrongful dismissal.
Charney is widely seen as a very talented marketer, but also as someone perhaps too close to the company he founded.
“He’s a micromanager of monster proportions,” a financial source familiar with the company said. “Dov is not a quitter. He’s going to fight. He’s obviously heavily invested in this business. He sees it as his, which is part of the problem. Once you have a public company…the rules sort of change and I don’t think he ever got with that program.”
Charney has taken a big step toward his goal of retaking control of the company, borrowing nearly $20 million from Standard General to buy 27.4 million shares of the retailer. The move boosted his stake to 43 percent from 27.2 percent.
But he can’t add more than another 1 percent without triggering American Apparel’s poison pill and diluting his stake. Charney plans to file a consent statement with regulators to rally other shareholders to his cause, setting up something akin to a proxy fight with the board. He has also called for a special meeting of shareholders to rejigger the board in September, but the company’s sought to block the meeting.
If the board’s investigation does turn up anything damaging on Charney, that could become fodder in the struggle for control of the company.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion