When does the second quarter end? Why, June, of course. And when was Dov Charney fired as CEO of the company he founded? June. Therefore, Dov Charney is responsible for the fact that said company lost less money in the three months ended in June than it had in the year-earlier period, according to Dov Charney, who is also not interested in having it pointed out that he was also CEO during the aforementioned year-earlier period, or that he was fired not for being bad at running American Apparel’s finances (which he arguably was), but for being an alleged scumbag. Read more »
Defaults are technical things. For instance, Argentina is technically in default right now, but nobody really cares just yet, because it has 30 days to figure things out before it is in the kind of default that actually matters.
So it is with American Apparel: When private-equity fund Lion Capital agreed to loan the t-shirt retailer $10 million at a bad credit-card rate, it did so on the understanding that company founder Dov Charney would remain in charge no matter how much he allegedly let things slide financially or how many employees he allegedly sexually harassed. So it was understandably perturbed when American Apparel fired Charney last month. Read more »
As American Apparel executives scrambled to pay vendors this spring, they frequently ran into a frustrating problem: Where were the checks? Many times, the answer was Chief Executive Dov Charney’s Los Angeles mansion. Starting early this year, Mr. Charney began signing all of the company’s checks—hundreds of them every month—one of several bottlenecks that plagued the fashion chain as its finances withered, people familiar with the situation said. Mr. Charney’s sexual antics have commanded the headlines, but beneath the salacious details was a business that had fallen into almost complete disarray, the people said. American Apparel, a major retailer with 10,000 employees and 249 stores, lacked seasoned executives, which often required Mr. Charney to dive in to fix problems. The general counsel was personally managing the company’s fleet of stores. This spring, the legal department was reduced to two people. And Mr. Charney was swimming in checks. They were delivered by assistants to his office or home, where they would pile up for weeks before resurfacing in the accounts-payable department, the people familiar with the matter said. Mr. Charney purposely held the checks while he investigated whether the amounts were correct, said a person familiar with his thinking. [WSJ]
Has the profitability of your company come into question of late? Have you been sued many, many times, typically for sexual harassment? Want to set the record straight but are unsure of what to say? Perhaps Dov Charney can help. In an interview with CNBC today, Charney told Jane Wells that any suggestion that American Apparel can’t turn a profit on its mesh unitards, gold lamé leggings, and fishnet bodysuits is totally off base. “I think you’re casting [the business] in the wrong light to say it’s unprofitable,” Charney said. “From an accounting perspective, from 20 feet up, yeah, it’s unprofitable. But if you get down to the numbers…we’re getting our groove back…[we'll return to profitability] probably maybe next year.” There was also this exchange. Read more »
In July of 2005, “Endeavor Acquisition Corporation (A Development Stage Enterprise) was formed in Delaware. Just before Christmas 2005, the company raised around $130 million in a “blank check” IPO, as a “Special Purpose Acquisition Company,” effectively a promise to go buy something worth owning, eventually.
The thing about SPACs is that they don’t generally start with an investment in mind, and they have particular restrictions on how long they can spend looking. In some cases, management must pay the fees paid out by the SPAC if it liquidates. This can get pricey. Think $1 million and above. In this case, Endeavor had 18 months from the “consummation” of the IPO to sign a letter of intent. After that, it was required to liquidate.
Said the firms filings:
Our efforts in identifying a prospective target business will not be limited to a particular industry, although we intend to focus on service businesses in one of the following segments:
• business services;
• marketing services;
• consumer services;
• health care services; and
• distribution services.
They had about 6 months left when they filed an 8-K announcing their intention to acquire American Apparel, “a leading provider of cotton leisure wear geared toward contemporary metropolitan adults and sold through company-owned retail locations and online,” which I suppose might have been termed a “distribution service company,” after a long night in Tijuana.