March: American Apparel said it anticipates that its 2013 loss will nearly quadruple to about $122.1 million following difficulties putting its new distribution center online late in the year. Strapped for cash, the company sells 61 million new shares at 50 cents each to raise capital.
This story first appeared in the December 17, 2014 issue of WWD. Subscribe Today.
April: Shares hit a 52-week low of 46 cents.
June: Dov Charney is ousted as chairman and suspended as president and chief executive officer over instances of “alleged misconduct” following years of sexual harassment accusations in a sexually heated corporate environment. Charney files for arbitration for unfair dismissal, reportedly seeking $23 million to $25 million in damages. Allan Mayer and David Danziger are named cochairmen.
July: New York-based hedge fund Standard General agrees to a series of arrangements that give American Apparel $25 million in financing, pay off Lion Capital’s $10 million loan and reconstitute AA’s board. In a move to tone down enmity between the parties, a “standstill and support” agreement is struck that gives the hedge fund control of Charney’s shares which, in combination with its own, add up to 43 percent of the company’s stock. Charney assumes the title of strategic consultant and the board shake-up gives the company its first female director, Colleen Brown.
August: American Apparel reveals that it spent $1.3 million in professional fees as it battled with Charney in the second quarter. Laura Lee joins the company’s board as its second female director.
September: Turnaround specialist Scott Brubaker, of Alvarez & Marsal, is named interim ceo and immediately reaffirms the company’s commitment to “sweatshop-free, ‘Made in USA’” production and its Los Angeles base.
November: The company reports a wider loss — $19.2 million — for the third quarter as sales in the period recede 5.3 percent. Bigger Capital Fund notes that legal fees tied to the Charney probe have cost the company $5.3 million.
Dec. 16, 2014: Charney is terminated for cause, Paula Schneider appointed chief executive officer. Shares rise 5.2 percent to 61 cents following the after-market news.