Dov Charney's American Apparel Rival May Open in 'Six Weeks'
Dov Charney, former CEO of American Apparel, is looking to set up a rival shop in the backyard of the company he founded. Charney has been scouting factory locations around South Central Los Angeles, just a few miles away from American Apparel's downtown Los Angeles headquarters, according to Bloomberg.
The new company, which has not yet been named, will focus on producing American-made basics, like T-shirts, for the promotional products industry—the same business model Charney employed at American Apparel. He said the plan is eventually to move the new apparel line into retail.
The new business is Charney's latest bid to recapture a share of the apparel market. After being fired from American Apparel in 2014, he pursued litigation against the company, was the subject of a restraining order and attempted a $300 million takeover of the apparel giant. This January, a judge granted American Apparel's bankruptcy reorganization filing, effectively ending Charney's plans to return to the business.
Since the bankruptcy proceedings, American Apparel has refocused its efforts on its promotional product business, fixing supply chain issues, investing in materials for its top products and launching a new wholesale website.
Charney told the New York Post that the company could be "six weeks away from making ourselves available to wholesale customers." How that would be possible without a factory remains a mystery, as does the funding for the new venture—there is speculation that he is working with Hagan Capital Group, which supported his takeover bid in January, but neither the investment group nor Charney is talking.
As for the new location—is it a deliberate attempt by Charney to compete with his former company? He claims to have different reasons.
“Downtown LA, I made it cool,” he said, referring to his decision to relocate American Apparel there in 2000. “The problem is, I can’t go back there. I can’t afford it. The next place I intend to make cool is south of the 10 freeway, right on the banks of downtown."