American Apparel Gives CEO The Boot, Stock Surges On The Announcement

6/19/14 1:44PM EST

American Apparel Gives CEO The Boot Stock Surges On The Announcement American Apparel Gives CEO The Boot, Stock Surges On The Announcement

Image via Flickr/ dovcharney

Following an unceremonious ousting of American Apparel’s kooky and often controversial CEO, Dov Charney, Wednesday night, the popular lifestyle brand’s stock is up by 5 percent today.

At least in the financial world, it seems the decision to remove Charney, 45, from his post was well-received as company shares rose 14 percent, according to USA Today. The stock, however, faces de-listing as it trades at 66 cents, which is below American Stock Exchange listing guidelines of at least $1 a share. American Apparel’s board members didn’t say exactly why they decided to give the company’s founder and CEO the boot, just that the decision had come after an “ongoing investigation into alleged misconduct.”

“We take no joy in this, but the board felt it was the right thing to do,” American Apparel’s newly-appointed chairman Allan Mayer said in a statement.

Dov Charney created American Apparel, but the company has grown much larger than any one individual, and we are confident that its greatest days are still ahead.”

As the center of controversy for years and having been sued by at least nine female employees for sexual-harassment allegations and multiple others for unscrupulous behavior, Charney’s professional demise still surprised many. The 45-year-old Canadian native admitted in a January interview with Marketplace that he was his “own worst enemy,” adding, “My biggest weakness is me. I mean, lock me up already! It’s obvious! Put me in a cage, I’ll be fine.”

Following the announcement, Charney has a 30-day suspension period before his contract is officially terminated. Although there has been no comment from his end on the decision, a source said Charney did not see the termination coming and plans to “fight like hell” to get his position back.

Following the announcement, American Apparel stock peaked at about 77 cents per share in early Thursday, before dropping back to the 67-cent range in afternoon trading.

 
 

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