June 19 - The board of the retailer American Apparel made the move to fire its CEO after investigating ''alleged misconduct.'' Dov Charney was a magnet for controversy. Fred Katayama reports.
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Sweatshop-free American Apparel will soon be CEO-free. Its board suspended founder and CEO Dov Charney and will soon oust him. He'll be replaced by CFO John Luttrell. The board said in a statement that it made the move after investigating "alleged misconduct."
Charney was a magnet for controversy. He and some directors have been slapped with lawsuits alleging sexual harassment and assault and battery, among other things. One ex-employee who sued him accused Charney of keeping her as a teenage sex slave. His company also drew criticism for its racy ads.
It's a fall from grace for the head of what was once considered a hip manufacturer and retailer. A rebel, Charney had his company make all of its clothes in the U.S. and pushed for higher wages and immigrant rights.
American Apparel has been struggling financially for years with weak sales and heavy debt. Its stock has lost nearly half its value this year. And now, the company says Charney's ouster may trigger a default under its credit agreement, so it'll be talking to its lenders for a waiver.