American Apparel Said to Be Increasingly Open to Keeping Charney

American Apparel Inc.'s board is increasingly open to keeping controversial founder Dov Charney at the clothing company, though not as chief executive officer, according to people familiar with the matter.

The retailer, which ousted Charney as CEO almost four months ago in an acrimonious split, is considering giving him a new role, said the people, who asked not to be identified because the deliberations are private. In the meantime, Charney is serving as a paid strategic consultant.

Reaching an agreement with Charney would help stave off a legal fight and preserve continuity at the company, which he founded in 1998.