American Apparel Terminates Ex-CEO Dov Charney; Names Paula Schneider CEO

(RTTNews) - American Apparel, Inc. (APP) said Tuesday that it has terminated former President and Chief Executive Officer Dov Charney for cause in accordance with the terms of his employment agreement.

The Los Angeles, California-based company also said that it has appointed veteran fashion executive Paula Schneider as Chief Executive Officer, effective January 5, 2015.

Scott Brubaker, who has been serving as Interim CEO, will continue in the post until Ms. Schneider joins the company, after which he will remain as a consultant to ensure an orderly transition.

Charney was suspended as president and CEO by the American Apparel Board on June 18 for alleged misconduct and violations of company policy.

Under terms of an agreement signed by Charney on July 9, a special committee of the Board oversaw an internal investigation conducted by FTI Consulting into the allegations against Charney.

Based on the investigation, the special committee determined that it would not be appropriate for Charney to be reinstated as CEO or an officer or employee of the company, American Apparel said in a statement.

While under suspension as CEO, Charney had been serving as a consultant to the company. That relationship also has now been terminated, the company noted.

Ms. Schneider has a well-earned reputation for improving the financial performance and operational efficiencies of numerous global fashion brands. She has served as president or senior officer of a number of retail and apparel companies, including Warnaco, Gores Group, BCBG Max Azria, and Laundry by Shelli Segal.

"We're pleased that what we set out to do last spring - namely, to ensure that American Apparel had the right leadership - has been accomplished," said Allan Mayer, Co-Chairman of the Board. "We are confident that Paula Schneider has the skills and background to lead the company to long-term success."