That’s an amazing turnaround for a brand which a few years ago was close to bankruptcy; its CEO surrounded by lawsuits alleging sexual harassment.
Even the stock is up.
Things are different now at the U.S.’s most-watched fashion advertiser (a company known to have girls in bikinis wash its roof). In the past two years, AA has undergone a wrenching series of changes to get the all-American clothing house back on the right track.
Here’s how Charney did it.
In the beginning …
American Apparel was started by Dov Charney while he attended Tufts in the late 1980s.
By 1997, the company moved from Charleston, South Carolina, to Los Angeles. In 2000, American Apparel moved into its current Los Angeles factory.
In 2006, the company was sold for more than $380 million to Endeavor Acquisition Corporation.
Charney stayed on and still runs the company today.
In 2004, concerns about the sexual nature of AA’s corporate culture emerged.
Charney gave an infamous interview with Claudine Ko, which became a relatively unedited article looking into the company, Charney and the women around him.
Ko claimed Charney masturbated in front of her — multiple times.
What followed were a series of lawsuits from former employees, now totaling nine, regarding sexual harassment, naked pictures, etc. In one of them, filed in 2011, a woman alleged Charney trapped her in his home as a sex slave.
But in the mid-2000s, sales were booming.
2008 was a very good year, until …
… Charney called his CFO a “complete loser.”
Ken Cieply resigned a few weeks later and the stock had one of its worst months in history. It would get temporary reprieve, but then suffer with the rest of the markets in the fall of that year.