RETAIL: American Apparel CEO is on her way out
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Loading... - MILEY LEVESQUE
- 26 Sep 2020
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LOS ANGELES — American Apparel CEO Paula Schneider is resigning from her post and expected to leave the company on Oct. 3.
The troubled retailer is currently exploring a sale of all or parts of the business, according to the Los Angeles Times. In her resignation letter, Schneider wrote the potential sale might not allow American Apparel to follow her turnaround plan or “allow the brand to stay true to its ideals.” The decision is reportedly entirely Schneider’s, one she made “with a heavy heart” and without influence from bondholders or potential buyers.
Schneider is expected to be succeeded by Chelsea Grayson, the company’s general counsel, executive vice president and corporate secretary. Grayson was largely responsible for pulling American Apparel out of bankruptcy earlier this year. The company filed for chapter 11 bankruptcy in October as ex-CEO Dov Charney tried to regain control of the company. Grayson pushed for American Apparel’s lenders to take over the company, eliminating shareholder control and getting rid of Charney.
WWD reported in August that American Apparel had hired Houlihan Lokey to explore sales options. Brad Scher, founder and managing member of New York consulting firm Ocean Ridge Capital, also joined the board of directors recently. Scher was brought on to give the board a stronger financial position as the company attempts to attract investors.
Schneider joined American Apparel in early 2015. At the time, she was unfailingly optimistic.
“It’s a company that does the right thing,” Schneider told Bizwomen. “It aligned with my own personal beliefs. It’s one of the few companies that has a voice. That’s what really made me want to take the position. I think we can do something great here.”
She immediately tried to reform the unruly culture Charney created, but Schneider remained unpopular among some employees. Last year, workers shared a video of them bashing a piñata resembling Schneider. In February, hundreds of employees protested layoffs and wage cuts that were part of Schneider’s turnaround strategy, shutting down one of the company’s T-shirt plants.
American Apparel is expected to close out this calendar year with less than $350 million in revenue.
