After a long-running saga, American Apparel has announced that the company's founder and former CEO Dov Charney has been fired. He was suspended as CEO in June due to "alleged misconduct and violations of company policy" but he had continued working with the company as a consultant.
While he was CEO a number of female employees made allegations of sexual harassment against him.
Media outlets are reporting that the move to oust him was prompted by new evidence which has emerged regarding a prior allegation of sexual misconduct. This information is accredited to sources who were close to the decision-making process - but remains unconfirmed.
In a statement, Mr Charney said: “Naturally, I am disappointed with the circumstances and my over 25 years of deep passion and commitment for American Apparel will always be the core DNA of the company.”
Mr Charney still remains a significant shareholder in the clothing retailer / manufacturer.
American Apparel has appointed Paula Schneider as its new chief executive. She has previously held executive positions in a number of fashion and retail companies.
Since news of Charney's dismissal broke, an internal letter signed by over 30 managers and director-level employees has been leaked to the media. It protests the company's decision to cut ties with its founder.
They say that they wanted him to be kept on to "lead the creative vision, growth and sales strategy of the company."
The letter claims that the decision to remove Mr Charney from the company was made without consulting them about "the impact it could have on the company, its employees and shareholders."
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So far the reaction from the market has been positive. The company's shares saw a bounce after the announcement, rising by 8.6 percent and closing up 5.5 percent.
As the above graph shows, the brand is long-passed its peak, which came over the festive period of 2007. Shares are down by 53 percent this year.
Dov Charney founded the company out of a Los Angeles warehouse in 1998. It currently has 245 retail outlets in 20 countries - including one in Dublin's city centre.
The brand makes and sells its own clothes and has been a longtime campaigner against sweatshop production.
