Dov Charney and the Question of Personal Ethics in Business
Yesterday, I wrote a story about American Apparel founder and former CEO Dov Charney’s new apparel company, which he plans to build into a rival of his former company. So far, we don’t actually know the name of the company, but we do know that it’s based in South Central Los Angeles, and is inspired by the gritty aesthetic of the neighborhood and city, co-opting the neighborhood and its image as a tool for brand-building and literal gentrification of the neighborhood. We also know that, based on what he told Business Insider, Charney hasn’t exactly learned his lesson when it comes to his personal life and how it intersects with his professional one. (His exact quote was “I don’t believe my behavior was bad. I don’t think I was a bad person. I’m passionate.”)
But is that important?
After American Apparel ousted Charney from its ranks, the company did a full-on 180 in terms of outward appearance and culture. What was once a company website you couldn’t go on in public due to the scantily clad models on the homepage now boasts modestly dressed millennials. After Charney received harassment accusations, the company severed all ties with him and hired Paula Schneider to create a more straight-laced, friendly and politically correct American Apparel. The product never changed, the company’s culture just got a much-needed face-lift.
But even now, American Apparel is having trouble. With stories emerging about the company having trouble affording its Los Angeles facility and talks of selling itself, did the personality heel-turn work?
And now I’ll get to my real question. Let’s say Charney’s new company comes out with a comparable product that can compete with American Apparel. Maybe it’s even superior. Would his background of less-than-kosher behavior affect the draw for customers to do business? Are you more likely to buy a slightly inferior product (again, this is all hypothetical and for the sake of debate) from a company whose morals align with your own, or would you buy the superior product knowing that the money is going to someone you can’t be on board with on a personal level?
It’s like the way some professional sports teams would balk (baseball pun unintended) at the idea of signing a player who is no doubt one of the top performers in the league, but is constantly in police stations and tabloid pages. Some wouldn’t go anywhere near them, others would rush in with huge contracts. It depends on whether they’re focusing on their images or potential wins, and even a boost in ticket sales thanks to the controversial new player.
To that point, could some customers be drawn to Charney’s new venture because of his contrarian and controversial persona? Some might see his edgy background as appealing.
He’s done a good job of building hype from his minimalist, mysterious website, “That’s Los Angeles, by Dov Charney.” Notice the fact that his name is right there, front and center, next to the city he’s using as the basis of the whole operation. There’s no hiding behind a corporate entity, keeping his persona separate from the business. He’s handcuffed his name and everything that comes with it to this new venture, and he wants us to know it. And, as I said yesterday, there’s no denying that Charney’s vision for apparel design is responsible for much of American Apparel’s current-day success, so who’s to say he actually won’t make what he calls the T-shirt “for the next decade?”
The question is, who’s buying?