Opinion | American Apparel suffering because of allegations against its founder

Reading Time:2 minutes

American Apparel fired its founder, Dov Charney (left), last year. Photo: Zuma Press

Published: 6:04am, 1 Jun 2015

News broke several days ago that American Apparel had filed a lawsuit against its founder and former CEO, Dov Charney, for breaking the rules of their original agreement. This is the latest in a flurry of legal threats between the former partners.

Sensationalist and sexualised advertising that defined the brand is just the starting point. The hipster fashion label, made in the US, has expanded globally over the years and attracted a growing army of loyal, young, trend-focused followers.

But this success has been offset by abuse claims against the brand's eccentric founder by former employees, the company's termination of Charney as CEO, and ensuing litigation in every direction. Then there was the famous leaked video of Charney dancing naked in front of his employees. The partnership between Charney and hedge fund Standard General, which now controls the brand, has been tenuous, with Charney claiming the fund deceived him about their intentions from the start.

His time at the helm of the brand was also marred by several claims of sexual and physical harassment by former employees, which were settled out of court or dismissed. He was finally fired in December and has been on the offensive since. Last month Charney filed a suit against Standard General for HK$30 million, claiming he was defamed.

Now the lurid details of the employee abuse claims are being bought to the fore with this latest suit filed by American Apparel. The New York Post unearthed some internal company documents that revealed claims that he called employees sluts and pigs, punched tables and threw objects at them. If Charney has been trying to turn the PR tide in his favour since being ousted, he is certainly not winning.

It must hurt to lose the company he launched in 1989 and built from the bottom up, making him worth about US$500 million at one point, according to Forbes. But the accounts of Charney's reputation for perversion and his abuse of power are doing him and the brand no favours.