-Just a note to say, this is not my work. I am full crediting the actual author of this work which is Laura M. Holson of the New York Times. She wrote a fantastic article in the New York Times which is on their website. It can be accessed here : http://www.nytimes.com/2011/04/14/fashion/14CHARNEY.html?pagewanted=1&_r=1&ref=style - It's just with the debate on this website about American Apparel and all the recent coverage, it's about time we allowed some debate from the other side on this. So have a read and comment away please. Take some time to vote in the poll on the sidebar as well!
HE'S ONLY JUST BEGUN TO FIGHT
IT was nearly midnight at the bar of the Palomar Hotel one recent Wednesday, and Dov Charney, the founder and chief executive of American Apparel, was on the attack during a conversation that had gone on for more than two hours and seemed nowhere near its end.
If his detractors want to understand him, Mr. Charney told a reporter as he sipped water and his assistant looked on, he suggests they read “The Apprenticeship of Duddy Kravitz,” a 1959 novel by the Canadian author Mordecai Richler.
Duddy is an ambitious Jew from Montreal who is obsessed with money and power; he suffers a nervous breakdown and declares bankruptcy, then takes money from a friend to buy land he covets. Mr. Charney, 42, is also ambitious, Jewish and from Montreal, and said he sees in Duddy a kindred spirit. Like himself, Mr. Charney explained, “Duddy is trying to be somebody.”
To many, Mr. Charney is not only a somebody but even something of a hero: finding a new niche in a saturated market for cotton basics by refusing to make them overseas (despite other companies moving operations abroad); crusading for workers’ rights; and successfully marketing the idea that young adults should embrace their natural sexuality in form-fitting shorts and tops with ads, redolent of 1970s soft-core pornography, that supplanted the Gap’s innocent “Khakis Swing” campaign in American pop culture.
But to others, he is a morally challenged provocateur.
In 2004, Mr. Charney masturbated in front of a female reporter from now-defunct Jane magazine. In 2008 he was lampooned on “Saturday Night Live” for walking around the office in his underpants. That same year Mr. Charney got into a tug-of-war with Woody Allen over the unauthorized use of a photograph on a billboard, forcing American Apparel to pay the director $5 million.
And last month, five former employees filed sexual harassment lawsuits against Mr. Charney, allegations the company said are untrue and vowed to fight, at the same time American Apparel warned investors it was on the verge of collapse, losing $86 million in 2010.
The question is whether Mr. Charney’s persona, once considered a commercial asset, might cause him to lose the company he built from scratch.
Hunched over a table at the Palomar, having plowed hungrily through a plate of miniburgers after a 14-hour workday, Mr. Charney was attributing his problems to what he called a “comedic media crusade” driven by a cartel of politically correct journalists who want to quash his ethos of personal expression at any cost. “I refuse to allow society to define me at this time,” he said.
He was dismissive of business consultants who American Apparel has summoned and more than once complained loudly about his board of directors, two of whom quit recently as the company seeks $5 million in financing to avert bankruptcy. But his biggest beef is with America’s culture, which he calls repressive and believes is split between a politically correct left and religious right.
“Only the restrained survive,” he said, comparing himself to Lenny Bruce, the 1960s comedian and counterculture idol arrested on obscenity charges and dogged by legal troubles. “Too often eccentricities are exploited by people who are trying to rip others down.”
Again and again during the conversation he quoted (unwittingly, it turned out) Martin Luther King, Jr. : “Every man should be judged by the content of his character.”
MR. CHARNEY was born in Westmount, an affluent area within Montreal, on Jan. 31, 1969. His parents, Morris Charney, an architect, and his mother, Sylvia Safdie, an abstract painter, divorced when Dov was young (they also had a daughter, Maya). Dov was diagnosed with attention deficit disorder in kindergarten and is dyslexic, his father said in a phone interview from Montreal, where he lives.
To instill a dose of order, Dov’s father said he once sent his son to Israel for summer camp. “He kept escaping,” Morris Charney said. “He was difficult to handle, so I practiced out of my home so I could keep an eye on him.”
What Dov may have lacked in discipline, he made up for in enterprise. At the Palomar, he recalled collecting rainwater in empty mayonnaise jars, which he sold to amused neighbors. At 11, Mr. Charney, who wanted to be a journalist, started his own school newspaper, written by fellow students and sold for 20 cents a copy. One day when Dov was selling his newspaper, a teacher accused him of panhandling, Morris Charney recounted. His son confronted the teacher and was suspended.
“Authorities never gave him the benefit of the doubt,” the elder Mr. Charney said, conceding, “He’s not great at tact.”
n 1997 he moved to Los Angeles, where he started his factory as a wholesale business. In 2000, he was profiled in the New Yorker; in 2003, American Apparel went retail and was an instant sensation. But it wasn’t until the 2004 Jane article, which portrayed Mr. Charney as an enthusiastic lothario preying upon his staff, that his bad-boy reputation was solidified.
“That Jane article put him on the map,” said Ilse Metchek, the president of the California Fashion Association and a friend of Mr. Charney’s. “What is American Apparel without sex? It’s a T-shirt and sweatshirt company.”
By 2005, Mr. Charney’s company had $201 million in annual revenue. But there were also signs of trouble. In May of that year three former employees filed two separate sexual harassment lawsuits in Los Angeles County Superior Court alleging that Mr. Charney created an unsafe environment where women were subject to sexual misconduct and innuendo. Two of those cases were settled, according to Peter Schey, a lawyer for Mr. Charney. A third is pending in private negotiations.
Nearly a year later, in February 2006, another former employee, Sylvia Hsu, filed a complaint with the Los Angeles office of the Equal Employment Opportunity Commission, saying she was sexually harassed by an unidentified co-worker and was fired as a result of a hostile working environment. The commission determined in August 2010 that the company not only discriminated against Ms. Hsu, but also against “women, as a class, on the basis of their female gender, by subjecting them to sexual harassment,” the company’s annual report said. Mr. Schey said the company was resolving the matter.
Last month, another five former female employees filed sexual harassment lawsuits against Mr. Charney, including allegations he had asked some of them to engage in sex acts against their will. One of those, Kimbra Lo, said in an interview that Mr. Charney photographed her nude in his bedroom. Some of those photos, scrawled with phrases like, “Don’t you think I deserve $250 million?” were posted on a Web site days after Ms. Lo filed her lawsuit. When Mr. Charney was handed screenshots and asked if he knew how his photos got online, he declined comment, citing the litigation. Eric Baum, Ms. Lo’s lawyer, said Mr. Charney released them to “smear and re-victimize” his client.
Mr. Schey declined to discuss the lawsuits except to say: “The allegations are false. I think this is an effort to shake down American Apparel.”
Mr. Charney would not talk about the litigation, either, but became agitated, shifting in his seat, when asked about his uneasy mixture of sex and business. It’s not the place of the government or judicial system, he said, “to opine upon people’s relationships,” adding, “It’s nobody’s business.”
TWO days after Mr. Charney’s late night at the Palomar, he was in his downtown office, a spare concrete rectangle that, he remarked, “looks like a child’s bedroom.” Racks of clothes lined three walls; on his desk sat a half-empty box of Honey Nut Cheerios and a bottle of Listerine.
Mr. Charney sometimes sleeps here overnight. When Mr. Schey, also his publicist, suggested Mr. Charney install a shower, Mr. Charney laughed. “That’s another lawsuit,” he said.
It was a different Dov from two days earlier. He was buoyant, even playfully referring to himself as “a complicated freak.”
On a tour of the factory, which employs 6,000 people, Mr. Charney raced through the sewing area while the mostly female crew clucked and cheered as he passed by. He showed off a new line of shoes and a fresh design for high-waisted jeans.
“When I’m happy, things happen,” he said. “When I let things get down, it just gets worse.”
He beamed when one worker said Mr. Charney gave him a bike so he could get to work. He smiled at a female employee and remarked that he remembered her photograph, something all new employees must submit with their applications. (However, American Apparel requires employees sign a confidentiality agreement that warned they cannot “photograph or record Dov Charney or any of his residences” and that if they do, they could be responsible for $1 million in damages. That’s because his lifestyle has made him a tabloid target, Mr. Charney said, adding that he doubted the $1 million was enforceable. “I don’t have people sign documents to go to dinner. I’m not at that point,” he said. But “to have one or two devices to protect the company’s dignity, I think that is all right.”)
Mr. Charney lives in a 20-room two-story concrete house on a hilltop estate in the Silver Lake neighborhood here, built in the late 1920s by Frank Garbutt, an industrialist and early movie pioneer. (In his front yard, which faces an outcropping of skyscrapers, Mr. Charney had a sculpture of an extended middle finger.) On the phone, Ms. Metchek described his home as a “dormitory,” where as many as 12 friends or employees — often young females — stay.
“He is not a good solitary soul,” she said. “He needs to have somebody around to say, ‘Yes, Dov,’ or feed into what he is saying.” She has also advised him: “I say, ‘Why don’t you get better people in there instead of those chirpy girls?’ ”
“She hasn’t been to my house and hasn’t met the people I live with,” Mr. Charney said of Ms. Metchek. Besides, he said, his home “is not for everybody. It’s not for long.” He would like to recreate the lifestyle Hugh Hefner did at the Playboy mansion in the 1970s, he said.
To illustrate the point, he grabbed a Time magazine from July 1973 and turned to an article about Mr. Hefner andBob Guccione, the founder of Penthouse. There, the two publishing magnates were photographed working on their magazines and enjoying dinner around a table, surrounded by women, naked and clothed.
He said he was worried about preserving the company’s distinct culture.
But Mr. Charney’s reputation “is a double-edged sword,” said Keith Miller, a company board member, in a phone interview. “As much as it can be tremendously value added, it is equal in erosion.”
In 2009, Mr. Charney was forced to let go of 1,800 workers, more than 30 percent of his factory staff, as part of animmigration sweep. An additional 700 left voluntarily, he said, which had a devastating effect on American Apparel’s productivity in 2010.
Last July, American Apparel’s accounting firm, Deloitte & Touche, resigned, citing “material weaknesses in internal control over financial reporting.” That triggered investigations by the Department of Justice and the Securities Exchange Commission. In August, American Apparel said it might not have enough funds to keep it afloat for 12 months. Shareholders filed class action lawsuits, claiming mismanagement. (The stock price has plummeted from $15 at the end of 2007 to 78 cents.)
In October, American Apparel amended its line of credit with the British private equityfirm Lion Capital, the company’s largest investor outside Mr. Charney, allowing Mr. Charney to hire several senior executives, including Marty Staff, the former chief executive of Joseph Abboud, as chief business development officer. “Despite the bad publicity, the company still has a loyal following,” Mr. Staff said in a phone interview.
Mr. Miller added: “I think that Dov has come to his senses that this is a bigger brand than company. He is best served to shareholders when he is developing product.”
There has been speculation that Mr. Charney might step aside and become creative director. He will have none of it. “I’m supposed to hire all these clowns, like they know better,” he said, sounding annoyed. “Oh, just put me in the creative room, the rubber room, the clown room. Give him a model. Give him a camera. He’ll be O.K.”
In his office, Mr. Charney crouched on the floor and covered himself with a gray square of fabric. “I am a ghost,” he said, pretending to be a no-name executive. He whisked a rival’s shoe against the wall with a thud, startling a sleeping puppy on the couch. He flipped through a vintage Playboy — a gift from his assistant — distracted when he saw an illustration he thought would make a great T-shirt. “I want to save that page,” he said.
It was a drawing of an upside-down naked woman’s torso, a hand hovering over her groin.
-Just a note to say, this is not my work. I am full crediting the actual author of this work which is Laura M. Holson of the New York Times. She wrote a fantastic article in the New York Times which is on their website. It can be accessed here: http://www.nytimes.com/2011/04/14/fashion/14CHARNEY.html?pagewanted=1&_r=1&ref=style