Paula Schneider’s American Apparel Inc. is coming into focus.
The chief executive officer has been making big changes at the company, pushing the brand to evolve, changing personnel, cutting back on inventory and stockkeeping units and laying off and furloughing some workers in the process. Now the company is also giving people on the factory floor more benefits.
Schneider sent out a memo to staff Friday that said she was “working diligently to establish an operating budget for the current year” and will be providing some “enhanced benefits” for workers. These include four paid holidays for non-store workers for the first time in American Apparel’s history. The holidays include the Fourth of July, Thanksgiving, Christmas Day and New Year’s Day and come after an earlier move to give workers three days of paid sick leave in accordance with the California Healthy Workplace — Healthy Family Act.
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The company is also adding to its medical insurance benefits and is considering setting up a 401(k) retirement plan for the first time.
But some of the changes at American Apparel have raised eyebrows, particularly among those who are close to ousted founder Dov Charney, who has been seeking a way back into the company and threatening to sue for millions.
American Apparel took out the back page of Vice magazine last month for an ad that cried out “Hello Ladies” in big block letters and noted that, “Women have always been in charge at American Apparel.” While the ad went on to list several employees by their first names, including senior creative director Iris Alonzo and creative director Marsha Brady, there’s a hitch: Alonzo and Brady were ousted in a reorganization of the company’s creative department in February.
The ad — and the resulting slip-up — illustrate the bad blood between the company’s Charney-led old guard and the new management. First, the ad actually was created by Alonzo, who was pro-Charney, and paid for by American Apparel. The pro-Charney staff remaining in the creative team were upset by Schneider’s media appearances that painted her as perhaps something of an anecdote to the controversial founder. As for how it could appear even following the dismissals of Alonzo and Brady — that’s where the bad timing comes in: It went to print about two hours after the duo were escorted out of the factory by security.
A number of disaffected workers have sought counsel and are railing against current management, which they say are changing what was a family into a business.