American Apparel CEO Fights Back A Pro-Dov Charney Email Insurgency
The company’s new CEO, Paula Schneider, recently responded to a series of mass emails sent to employees by an anonymous insider. The emails were critical of American Apparel’s new management and the hedge fund backing the company.
American Apparel may have fired its founder Dov Charney last year, but new management is learning that he’s far from gone.
A group of Charney supporters within the company, who operate behind the name and hashtag #TeamDov, have been rallying support for the founder and slamming American Apparel’s new executives and investors through a digital campaign that management is struggling to quell. One employee has been sending pro-Charney mass emails to American Apparel employees through a variety of anonymous addresses during the past two months, causing enough ruckus that CEO Paula Schneider was forced to address the messages in a staff-wide memo on Feb. 19, BuzzFeed News has learned.
“Over the last couple of months, we all have received â€˜blast’ emails from an anonymous outsider criticizing American Apparel, its management and its policies,” Schneider, who started as CEO last month, wrote in a message obtained by BuzzFeed News. “Some of the emails have even been designed to appear like they are being sent from inside the company. I have refrained from responding to these emails because I feel they do not deserve our collective attention.”
She continued: “That said, I cannot let today’s email — which stooped to personally attacking hard-working members of the American Apparel team — go without a response. As a company, we embrace free speech and social commentary by our employees. That is a valued part of our culture. But today’s email provides an opportunity for me to reach out to all of you. I encourage you not to be influenced by unfounded personal attacks or baseless threats about job security sent by outsiders who do not have the company’s best interests at heart.”
The specific email Schneider is referring to accused Standard General, the hedge fund with the most financial control of the company, of “draining” American Apparel and forcing cutbacks at the retailer. The email included a link to a New York Post story about a lawsuit against Standard General, in which unsecured creditors of RadioShack are accusing the hedge fund of timing its investment in RadioShack to maximize a payout from the company’s recent bankruptcy, raising concern that American Apparel could suffer the same fate. The email noted that Colleen Brown, American Apparel’s newly appointed chairperson, was brought on to the board last year by Standard General (though it incorrectly identified her as CFO) and that new General Counsel Chelsea Grayson was Brown’s pick.
“We need Standard General OUT,” the employee wrote in the Feb. 19 email. “We have a bunch of consultants draining our company sitting in a room all day making 6 figures a month. THAT IS NOT AMERICAN APPAREL.”
One of the anonymous emails described the campaign as being about more than just Charney, saying it is also a response to American Apparel “being taken over by corporate Wall Street guys who don’t care about the company or the brand or the image or its employees.”
The emails reflect concern among employees that as American Apparel tries to right itself under new management, it could lose sight of its core values that were championed by Charney. The founder was a vocal advocate for treating workers generously, paying a fair wage, and making high-quality items in America.
A source inside the company told BuzzFeed News that management has spoken of their commitment to the company’s principles, and says it will continue to focus on remaining sweatshop-free, paying fair wages, and manufacturing in the USA.
While Schneider wrote that the emails came from an outsider, BuzzFeed News confirmed they originated from a current employee, who requested anonymity citing fear of retribution. The employee said they have roughly 5,000 americanapparel.net addresses and sent the messages in batches of 500; multiple employees have told the anonymous emailer that the messages have been deleted from their inboxes as American Apparel’s management works to stem the tide.
A spokesperson for American Apparel declined to comment.
The pro-Charney insurgency shows how tightly a founder’s personality can become entwined with a company. Emails prior to the Feb. 19 message centered around gaining signatures and statements for the Team Dov website, which says it’s “a statement of support for Dov Charney and his business vision at American Apparel from workers and executives at all levels of the company and around the world.” Hundreds have since signed the petition.
Charney, who founded American Apparel in 1998, was served with a termination letter in June for a long list of reasons including breaching his fiduciary duty, violating company policy, sexual harassment, and misusing corporate assets.
Charney was working as a paid consultant for American Apparel during an internal investigation that began in July, but was fired in December; the #TeamDov website was born almost immediately after. In a statement on Dec. 22, his lawyers described the investigation as “a complete sham” and said the decision to terminate him was “completely groundless.”
Charney pledged 43% of his stake in the company to Standard General this summer in a deal that apparently soured. He told Bloomberg News in late December that the hedge fund conspired with a board member to oust him after agreeing to reinstate him.
He told the news outlet: “I gave them my entire life’s work and they agreed to put me back in, but instead they used this investigation to fire me. They betrayed me.” Charney has not commented on the current round of anonymous emails and the response by management.
Standard General, for its part, said last December it “supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the board of director’s decision to terminate him based on the results of that investigation.”