Dive Brief:
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The Securities and Exchange Commission is looking into the ouster of American Apparel founder and former CEO Dov Charney, the company said Wednesday in a filing.
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Sources say the inquiry involves the company’s ouster of Charney and matters that have arisen from it. Charney was demoted and ultimately fired late last year after a bruising and drama-filled summer.
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American Apparel Wednesday also reported Q4 net sales fell 9% year over year to $153 million, and its retail and wholesale sales both fell. Legal and consulting fees stemming from the Charney matters cost another $3.8 million in Q4, the company said.
Dive Insight:
It looks like it will be a while before American Apparel really gets out from under its Dov Charney-related woes. The company is still paying for the drama, literally, and now must contend with the SEC, with which it says it is fully cooperating. Charney has continued, well into the new year, to make moves that show he thinks he may yet come back.
The company hasn’t made a profit in six years, and, laden with debt, isn’t in the best position to battle back from all this drama. New CEO Paula Schneider, though, has already made some bold moves changing up the company's culture and bringing on new people with strong retail resumés.
