Dov Charney

Dov Charney
Dov Charney
Born	Dov Charney (1969-01-31) January 31, 1969 Montreal, Quebec, Canada
Occupation(s)	President and CEO of American Apparel Inc.

Dov Charney (born January 31, 1969, Montreal, Canada) is the founder and CEO of American Apparel, a clothing manufacturer, wholesaler, and retailer which he started at age 20. Charney is known for his success as an entrepreneur, and passion for simple clothing. His "contrarian" leadership style, which he feels promotes creativity, has drawn both extensive praise and criticism. Charney has earned recognition in the media for management decisions to pay a fair wage and refusing to outsource manufacturing. The Los Angeles Times named him as one of the Top 100 powerful people in Southern California and in 2009, he was nominated as a Time 100 finalist by Time magazine.

Early life

Charney's father, Morris Charney, is an architect, and his mother, Sylvia Safdie, an artist. Both his parents are of Jewish descent. Charney is a nephew of architect Moshe Safdie. He attended Choate Rosemary Hall, a private boarding school in Connecticut and St. George's School of Montreal. Charney grew up with, and was influenced heavily by, the culture of Montreal. He briefly attended Tufts University. As a teenager, he "fell in love" with the United States, and drew a sharp contrast between American and Canadian cultures. As a teenager, Charney was an admirer of American-made products. As a teen, he became disillusioned with Quebec nationalism which was widespread during the 1980s. In interviews, he has stated that he considers himself to be a continuation of the trend of Canadian-Jewish entrepreneurs.

At an early age Charney showed signs of an entrepreneurial and independent spirit. According to the New York Times his first venture was selling rainwater he had collected in mayonnaise jars to his neighbors. In 1980, The Canadian Jewish News published a story on Charney with a headline that read "11-Year-Old Schoolboy Edits His Own Newspaper.". He sold these newspapers for 20 cents a copy near his school, only to be caught by a teacher and accused of panhandling and suspended from school. As a child he was featured in the documentary 20th-Century Chocolate Cake, in which he discussed the economics of a summer camp he attended.

Entrepreneur

Charney's ventures were conceived in high school, when he began importing Hanes and Fruit of the Loom t-shirts across the border to Canadian friends. At Choate, he claims to have shipped as many as 10,000 shirts at a time, using a rented U-Haul truck to transport the goods.

In 1987, he enrolled at Tufts University. While at Tufts, he continued to operate his business, but dropped out by 1990 to pursue the apparel business full time. He borrowed $10,000 from his father and moved to South Carolina to transition from importing T-shirts to manufacturing them. In 1996, Charney's company restructured when it was unable to cover its debt and filed for Chapter 11. On July 4, 1997, he went to Los Angeles. By 2003, Charney had opened his first retail store and employed over 1,300 people.

In 2004, he was named Ernst & Young's Entrepreneur of the Year and Apparel Magazine's Man of the Year. In 2012, ABC News called Charney “one of the most controversial--and hyperactive--entrepreneurs in the country.

American Apparel

Main article: American Apparel

Building the brand

In 1991, Charney began making basic T-shirts under the American Apparel brand. The initial T-shirts were made of simple 18-single jersey and were positioned to compete with the Hanes Beefy-T. The primary market objective was to sell garments to screen printers and wholesale clothiers in the United States and Canada. In 1997, as his design, the 'Classic Girl', built momentum, Charney transitioned manufacturing to Los Angeles. In 2000, American Apparel moved into its current 800,000 sq ft (74,000 m²) factory located in downtown Los Angeles.

It was his aim in building American Apparel that it ‘live beyond [his] lifetime.” According to Chareny: "We'll be a heritage brand. It's like liberty, property, pursuit of happiness for every man worldwide. That's my America."

Role as Manufacturer/Retailer/CEO

Charney is officially founder and CEO of American Apparel, but formerly went by the title of "Senior Partner." He infused his personal progressive politics into the company brand paying factory workers between $13–18 USD/hr, offering low-cost, full-family healthcare for employees and taking a company position on immigration reform. Workers are also allowed free international phone calls during work hours. He claims to do this not for moral reasons but because it is a better business strategy. He makes all product development and creative hiring decisions himself.

Under Charney, American Apparel instituted "team manufacturing" which pools the strongest workers towards priority orders. After its implementation, garment production tripled and required a less than 20% staff increase. He formed the company as a domestic vertically-integrated manufacturer, making him the largest manufacturer still producing garments in America. Because of its vertically integrated and domestic manufacturing model, American Apparel's gross margins are actually significantly higher than other basic apparel brands. According to the company, it's blended margins are roughly 70% (while GAP averages about 30% and luxury brands like Prada are between 65 and 70%.)

Initially American Apparel was a wholesale brand but in 2003 it expanded into the retail market. Its first stores were in Montreal, New York City and Los Angeles. By 2005, the company had over $200M in revenue. Retail operations have grown to include 260+ retail stores. In 2008, he was named Retailer of the Year at the Michael Awards, a fashion industry mainstay. The award's previously gone to Calvin Klein and Oscar de la Renta.

In December 2006, Charney entered into an agreement to sell American Apparel for $360 million to the special purpose acquisition company (SPAC) Endeavor Acquisition as a way of taking the company public. As a result of the agreement, Charney was named President and Chief Executive Officer of the publicly traded company known as American Apparel, Inc. He remained the majority shareholder, and all full-time employees of American Apparel were given up to 500 shares of stock depending on length of employment.

Fashion and Lifestyle

Charney is known for his passion for clothing. His fashion sense is geared towards "young metropolitan adults." The 'fit' of a shirt is something he often stresses. He was named Man of the Year by both the Fashion Industry Guild and Apparel Magazine for his design work. In 2008, The Guardian named American Apparel "Label of the Year".

Charney lives in the Garbutt House, historic mansion atop a hill in Silverlake designed by Frank Garbutt, a early movie pioneer and industrialist. The home is made entirely out of concrete due to Garbutt's deathly fear of fire. He is consumed with work, often sleeping in his office at the company's factory, leaving little separation between his personal and work life. The house often functions as a dormitory for out of town workers doing business at the company headquarters.

Advertising and brand management

Charney is directly involved in his company's design, branding, and advertising. His print campaigns are award-winning and among the most followed in the garment industry. Charney has promoted a branding strategy that spotlighted his treatment of workers as a selling point for the company's merchandise, promoting American Apparel's goods as "sweatshop free." A banner on top of the downtown factory states "American Apparel is an Industrial Revolution."

The company is also known for its simple and provocative ads featuring girls and employees. The subjects are often not but sometimes professional models, and often chosen personally by Charney from local hangouts and stores. He shoots many of the advertisements himself. His advertising has been criticized for featuring young, even teenage, models in sexually provocative poses. However, it has also been lauded for honesty and lack of airbrushing. In 2005, Charney won the "Marketing Excellence Award" in the LA Fashion Awards.

Annie Hall Billboard Lawsuit

In May 2007, American Apparel posted two billboards in New York and Los Angeles featuring a still image of actor Woody Allen from his 1977 movie Annie Hall. They were removed at Allen's request within a week; he subsequently sued American Apparel on various grounds (including rights to privacy, and property rights).

According to Charney, the billboard, which featured a photo of Allen as an Orthodox rabbi and "cheeky" Yiddish text ("The High Rabbi"), was a commentary on the tabloid coverage he received from several unproven sexual harassment lawsuits and the way that he and Allen—both Jews—had been treated by the media. In an article published in The Guardian he wrote:

There are no words to express the frustration caused by these gross misperceptions, but this billboard was an attempt to at least make a joke about it.

American Apparel's insurance company settled the case for U.S. $5 million (half of what Allen sought in damages) on the eve of trial, the largest settlement of this type of lawsuit in New York State history. Charney insisted that settlement was not his decision and expressed regret at being unable to defend in court what he believed to be speech protected by the First Amendment.

Controversy

Charney has been the subject of several sexual harassment lawsuits. To date, none of the accusations has ever been proven. Some cases remain pending, but the remaining were dismissed, remanded to private arbitration, or “thrown out”.

Charney has maintained his innocence in all the lawsuits, telling CNBC that “allegations that I acted improperly at any time are completely a fiction." The company and independent media outlets have publicly accused lawyers in the lawsuits against American Apparel of extortion and of "shaking the company down." On the eve of trial in one case, the plaintiff confessed that she had not been subjected to sexual harassment and agreed to go to an arbitration hearing aimed at clearing Dov Charney's name. However, the plaintiff failed to show up to the hearing and a ruling was unable to be reached. As a result, the $1.3 million settlement was dissolved and the matter reemerged as a negative media controversy for Charney. The company was later sued by four ex-models for sexual harassment, including one separately named plaintiff who sued the company for $250 million. The latter lawsuits were subject to much controversy when unsolicited nude photographs, consensual sexual text messages and requests for money surfaced. Charney was accused of being responsible for these leaks in a later lawsuit.

In 2004, Claudine Ko of Jane magazine published an essay narrating multiple sexual exchanges that occurred between them while spending time with Charney. The article alleged that Charney consistently propositioned his employees. Charney admitted to using the word "sluts" in front of employees, in a deposition on another sexual harassment case, and denied that "slut" was a derogatory term. The article's publication brought extensive press to the company and Charney, who later responded that he believed that the acts had been done consensually, in private and outside the article's bounds.

External links

• Official American Apparel website
• Dov Charney website
• Dov Charney Photo Gallery
• Collection of Dov Charney Quotes
• Dov Charney's Rise to and Fall from (and Rise to) Grace Jossip.com