American Apparel's Dov Charney is out for good; fired "for cause"

New York - In a long-awaited decision handed down late Monday, Dov Charney, the controversial founder of American Apparel, has been fired "for cause" as CEO. He was suspended as president and CEO of the hipster apparel chain in June for alleged misconduct and violations of company policy, American Apparel said in a statement. The decision was made by the board’s “suitability committee,” which was formed in the wake of Charney’s suspension to oversee an internal investigation.



“Based on this investigation, the special committee determined that it would not be appropriate for Mr. Charney to be reinstated as CEO or an officer or employee of the company,” said American Apparel in a statement. "While under suspension as CEO, Mr. Charney had been serving as a consultant to the company. This relationship has now been terminated.”



The retailer has tapped Paula Schneider, a former Warnaco executive, to succeed Charney, effective January 5. She worked for a number of retail and apparel companies, including Warnaco, Gores Group, BCBG Max Azria, and Laundry by Shelli Segal.The interim chief executive, Scott Brubaker, will remain as a consultant to help with the transition.



Charney has been dogged by lawsuits and rumors and allegations of misconduct for years, mostly over his personal conduct with women and poor judgment.



It remains to be seen whether Schneider can put the struggling American Apparel back on track.



The company reported a larger-than-expected loss of $19.2 million in its third quarter, ended Sept. 30, and falling sales here and abroad. And some industry experts noted that termination could set off a long legal battle from Charney who has dedicated the better part of his career to building the company.