- POSTED: 25 Jun 2014 19:11
The ousted founder of US fashion label American Apparel, Dov Charney, is fighting to get back his job as chief executive, and as the company's stock price continues to plunge.
NEW YORK: The ousted founder of US fashion label American Apparel, Dov Charney, is fighting to get back his job as chief executive, and as the company's stock price continues to plunge.
American Apparel shares fell another 21.35 percent to 53 cents Tuesday on Wall Street, making for a market capitalisation of just $91.69 million. In the company's heyday the shares had been worth as much as $15.
Charney was suspended with immediate effect last week by the board of directors and will go within a month.
Charney, who was known for sometimes walking around his factories in his underpants, has been accused of sexual harassment by several of his own employees.
The board said he was being let go as part of a probe into his conduct.
But Charney filed papers on Monday with the American Arbitration Association to try to get his job back, according to sources close to the case.
In a stock filing seen on Tuesday by AFP, Charney, 45, said he would vigorously fight what he called an unjustified decision by the board.
He said he had been approached by people including shareholders who plan a shakeup of the board.
If his dismissal proceeds, Charney, who owns 27 percent of the group, told the Financial Times on Tuesday he will seek severance pay of between $23 million and $25 million.
Besides his odd behavior, Charney is blamed for his failure to halt the firm's slide into the stock market dungeon.
Charney founded American Apparel in 1989 in Montreal before moving its headquarters to Los Angeles.
The company grew aggressively for many years and broke with the crowd with what it calls a "sweatshop-free, Made in USA manufacturing philosophy", keeping much of its production in its California factory.
American Apparel has approximately 10,000 employees and operates 249 retail stores in 20 countries.
But the firm has struggled financially of late. Last year, it lost $106.3 million on revenue of $633.9 million. That comes on top of losses of $37.3 million in 2012 and $39.3 million in 2011.