The board of American Apparel voted Wednesday to fire its controversial founder and CEO, Dov Charney, because of an "ongoing investigation into alleged misconduct," the company said.
Charney, who started selling t-shirts as a student at Tufts University in the late 1980s, and grew American Apparel into a major retailer of made-in-USA clothing, has been repeatedly accused of sexual harassment by employees over the past several years. At one point, seven women had filed suit against him, though many of the cases have been dismissed.
Charney has also been accused of choking a store manager, has been known to walk in the office in his underwear, and has reportedly propositioned employees and used sexually charged language around colleagues.
However, it wasn't immediately clear on Wednesday which incident had caused the board to move to terminate Charney. American Apparel had defended Charney against various allegations in the past.
American Apparel's board appointed John Luttrell as interim CEO. It suspended Charney as president and CEO, and said it would fire him after a required 30-day waiting period.
"We take no joy in this," said Allan Mayer, who was appointed as co-chairman of the board on Wednesday. "Dov Charney created American Apparel, but the company has grown much larger than any one individual."
Despite the Los Angeles-based company's feel-good image â€" it calls its products "sweatshop-free," and says it pays its American garment workers 50 times what a Bangladeshi worker might earn â€" American Apparel has always attracted controversy. The company's ads often feature seminude models in provocative poses, and Charney shot some of those photographs.
American Apparel has also fallen on hard times financially. Its stock lost more than 95% of its value since 2008, and now trades at less than a dollar. Reports have surfaced for several years that Charney was in danger of losing control of his company.
In a statement released Wednesday, American Apparel said that because of the management changes, it "may have been deemed to have triggered an event of default under its credit agreements."
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