Dov Charney, the ousted founder of American Apparel Inc., has discovered a new promised land.
The 47-year-old has selected South Central Los Angeles -- best known as the epicenter of the 1992 Rodney King riots and the birthplace of gangster rap -- as the backdrop for his career’s resurrection.
In an interview, Charney said he’s scouting sites for a factory there, a few miles from American Apparel’s manufacturing hub. Much like with that earlier facility, he plans to be a pioneer in another burgeoning part of the city.
“Downtown L.A., I made it cool,” Charney said of American Apparel’s neighborhood, where it opened its headquarters in 2000 not far from Skid Row. “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.”
Despite being fired from American Apparel in December 2014 and losing a battle to buy the chain out of bankruptcy in January, Charney remains confident. He pointed out that he’s still the guy who created a bare-bones wholesale T-shirt maker and grew it into a company with $600 million in sales and almost 300 stores around the world at its peak.
“I have a vision,” Charney said. “My business model works.”
Higher Pay is Part of the Picture
Charney offered only a few details, but the tenets of American Apparel will remain. The garment makers will be paid well -- above minimum wage -- and possibly be part owners of the company. The new entity will push for workers’ rights and higher pay, much like Charney’s predecessor.
The new concern also will sell American-made basics like T-shirts and underwear. The plan is for a wholesale business selling clothes to screen printers to debut by the end of this year. A consumer brand focused on selling through the Web will follow. That brand, no surprise, will have an edge.
“We hope to create a brand that captures the attention of the world,” said Charney, who first talked about his new venture last week on PBS during an interview with Tavis Smiley. “It will be irreverent and authentic.”
Charney declined to discuss funding other than saying its financing “will be interesting.” Charney has a proven history of raising money, including his improbably assembled bid to buy American Apparel out of bankruptcy. The judge ultimately sided with a plan to sell the chain to its bondholders.
Potential Investors Include Hagen Capital Group
Charney’s backer in that attempt, including Hagan Capital Group, initially said it would put up $20 million for Charney’s new venture. The firm remains in talks with him about the endeavor, said Chad Hagan, managing partner.
“Dov still has a lot of work left in him,” Hagan said. “He’s a very talented entrepreneur.”
Charney wants to stay in Los Angeles because it’s close to large ports and has skilled garment workers, which he said could easily be recruited from his former company. Being U.S.-based also will allow the company to be more nimble in reacting to trends and meeting orders -- all attributes he credits for American Apparel’s rise.
“I’m not interested in doing something that’s not culturally relevant,” Charney said. “With American Apparel, I wasn’t selling to Middle America. I went into the heart of New York, L.A. and London. I went for the most challenging markets. I want to do that again.”