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Dov Charney’s Last Laugh

Looks like we will soon be saying R.I.P. to American Apparel as we know it by early 2017. The former apparel giant's funeral procession wouldn't

Looks like we will soon be saying R.I.P. to American Apparel as we know it by early 2017. The former apparel giant’s funeral procession wouldn’t be complete without a few words from its once scourned founder, Dov Charney. Befittingly so, Charney has every right to have a last and final laugh and the company that ousted him and in a few short years, is publicly biting the dust.

Charney correlated the company’s failure to his absence

In a recent interview with Bloomberg, Charney correlated the company’s failure to his absence.

“This company can’t survive without my leadership,” Charney said. “They didn’t know how to run it. They took a company that could have lasted a century and crashed it into a wall.”

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As arrogant as it may seem, the data seems to support Charney’s statements. With Charney at the helm, American Apparel’s sales peaked in 2013 with sales at a reported $633.0 million. After his  2015 removal, revenue dropped to $497 million, a stunning 18 percent loss.

“At what point do they say we made a colossal mistake and destroyed the largest U.S. apparel company?” Charney said to Bloomberg. “The lesson is there has to be some respect for entrepreneurship and management. They didn’t respect my management team and creative team. We built an extraordinary business.”

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It’s true that the American Apparel creative aesthetic, essentially its lifeblood, was the primary point of the brand change. The company decided to pivot its image, steering clear of Charney’s hypersexualized depictions, and unveil more conservative advertising in modest, basic apparel.

It’s easy to see who won the battle, but the victor of this war is unclear. It was reported yesterday, Gildan Activewear will purchase American Apparel’s intellectual property for $66 million. This allows the selling American Apparel’s basic items, like T-shirts, to screen printers and promotional products companies. However, the fate of American Apparel’s storefront locations is still in limbo. In order for  American Apparel to maintain its consumer-focused business arm, another company would have to buy its retail assets.

 

Charney, on the other hand, has been working on a new apparel startup. The secret project is now known as That’s Los Angeles by Dov Charney. In earlier interviews when asked about American Apparel, Charney has stuck by his guns and made no apologies. Time tells all, and today we can conclude that American Apparel was stronger under Charney’s leadership.

American Apparel will still be a super company in the wholesale world. The more intriguing storyline will be how Dov Charney’s That’s Los Angeles will perform in the retail market without his former company as prime competition.

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