American Apparel, Lululemon founders fight for control
Thursday, July 03, 2014 - 01:30
American Apparel's ousted CEO forks over his entire stake to his ally, while Lululemon's founder sounds out private equity firms over taking the retailer private. Fred Katayama reports.
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On Independence Eve, the flamboyant founding fathers of two hip retailers are fighting to retake control of their companies. Reuters has learned that American Apparel's ousted CEO Dov Charney has forked over his whole stake and voting rights to his ally, hedge fund Standard General. He had initially borrowed shares from the fund in a bid to regain majority control of the apparel maker. But the company adopted an anti-takeover defense that would dilute his holdings if he were to buy more shares. American Apparel has agreed to negotiate directly with Standard General.
It is apparently trying to undo some of the damage Charney created. The New York Post reports that it's considering adding women to its board for the first time. The board fired Charney as chairman amid charges of misusing corporate funds and helping disseminate nude pictures of a former employee.
American Apparel's stock rocketed higher on the latest developments.
Lululemon's founder Chip Wilson, whose comments blaming women's figures for problems associated with his cultish yoga pants infuriated customers, is talking again, this time to private equity firms. The Wall Street Journal says he's sounding them out to see if they might be interested in taking the retailer private. One potential stumbling block: the sheer size of the premium needed over its $6 billion market valuation.
But investors were optimistic, sending Lulu's shares higher at the start of trade.
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