American Apparel and its controversial CEO, Dov Charney, have selected a new CFO who they hope will prove a winner.
If so, it would be a turnabout in the eyes of Charney, who famously flamed the company’s former finance chief, Ken Cieply, as a “complete loser” in a Wall Street Journal article last April — shortly before Cieply’s departure.
Taking over as finance chief now is Adrian Kowalewski, who has worked at American Apparel for two years as director of corporate finance and development. He has been a member of the company’s board of directors since December 2007.
Kowalewski previously was an investment banker with Lazard Freres, Houlihan Lokey Howard & Zubin, and CIBC World Markets.
In the Journal article, Charney had characterized Cieply as having no credibility in the apparel industry. The CFO, who had guided the company through its initial public offering late last year, stayed on for several weeks before departing to seek new opportunities.
American Apparel made some damage-control efforts, spinning Charney’s comment as an “off-the-cuff remark” that had been “maliciously manipulated by the reporter.” Charney himself chimed in by publicly praising Cieply, saying in a written statement that “his impressive pedigree in apparel was a key reason” for hiring him two years earlier.
Charney’s public trashing of his CFO was only one storm in a maelstrom for the company. Since it went public, the price of American Apparel shares has plummeted from around $16 all the way down to just over a buck and a half. The company also defaulted on debt covenants in 2007.
In addition, a former employee of the company, Roberto Hernandez, in November filed a lawsuit claiming that he had been fired last year after refusing to acquiesce to requests that he pad the inventory on American Apparel’s books. The company issued a statement denying Hernandez’s allegations.
Charney also has been the subject of at least five sexual harassment lawsuits by employees. Four were settled out of court, and one is pending.