Unzipping American Apparel with Sasheer Zamata and Jared Goldstein | 86

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Speaker 2 Y'all, what is going on with men?

Speaker 2 We've talked about a lot of men with the audacity on this show, but today's main character somehow goes from liking soft t-shirts to sexualizing dogs in advertisements.

Speaker 2 Why can't millionaire dudes just go be rich? As one of my guests puts it, quietly, in a corner, far away from people.

Speaker 2 But before I get too carried away roasting millionaires, let's get into it, besties, because this story is buckwild.

Speaker 7 American Apparel says its decision to oust its controversial chief executive Doug Charney was linked to alleged misconduct.

Speaker 9 He has this crazy theory that ages the new class.

Speaker 2 People said that you were shooting models who were too young.

Speaker 8 Some say those ads crossed the line and that the CEO did too at work in his underwear.

Speaker 11 It's so unusual to have a board force out the person who created the Empire from scratch and such a high-profile figure too.

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Speaker 2 From Wondery and at Will Media, this is The Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time.

Speaker 2 I'm your host, Misha Brown, social media's superstar and aspiring corporate baddie at your bestie, Misha. And today, we're talking about the rise and fall of American apparel.

Speaker 2 On our show today, we have an amazing returning guest. She's an actress, comedian, and co-host of the podcast Best Friends.
It's Sashir Zamedo.

Speaker 18 Hello. Hi.

Speaker 19 Thanks for having me.

Speaker 2 So exciting. From Action Park to American Apparel, you really are very verse.

Speaker 19 Very verse. Yeah.
I was talking about all the flops.

Speaker 2 All the flops. Also joining us, I'm such a huge fan.
I'm so excited to have this actor, comedian, and host of the podcast. Sorry, what? It's Jared Goldstein.
Hey, Bestie.

Speaker 20 Hi, what's up?

Speaker 21 Isn't it such a little tight rope to walk every time you have to introduce people?

Speaker 19 Oh, definitely.

Speaker 17 Yeah. I know.

Speaker 21 We're so talented.

Speaker 19 It's a skill.

Speaker 4 Things we can do.

Speaker 2 Okay, so here's a question. When I say American apparel billboard, what comes to your mind?

Speaker 19 Sluts.

Speaker 19 Like thongs, exposed nipples. Yes.
And I'm also always like, are they okay? Like, is everyone okay in the situation? Was everyone consenting? Did they know that they were going to be on a billboard?

Speaker 19 You know, the eyes are glossy.

Speaker 21 Yeah, a lot of them look surprised that they were on a billboard. in the photo.

Speaker 19 Yeah, they got caught doing something.

Speaker 2 And honestly, with this story,

Speaker 2 that's a fair question to ask.

Speaker 2 So yes, those infamous ads are the brainchild of Dove Charney, the founder and former CEO of American Apparel. Like, I describe him as a gregarious party animal with a short fuse.

Speaker 2 This textile entrepreneur loves trouble and has made a staggering amount of avoidable mistakes, leading to legal trouble, boardroom drama, and public excoriation.

Speaker 2 So let's unspool Mr. Charney, the myth, the legend, the guy you'd move 10 feet away from on a subway train.
But first, let's please enjoy this quick montage to get a taste of his personality.

Speaker 12 Someone we talked to said Dove Charney is very likable.

Speaker 16 He's just not a normal human being.

Speaker 2 Was that my mother?

Speaker 2 In the fashion business, entertainment business, women are important to have around.

Speaker 24 57% of Americans meet their spouse at work. See, my view of America, it's life, liberty, property, pursuit of happiness for every man worldwide.

Speaker 2 Religion freaks me out, man.

Speaker 2 I just believe in fucking.

Speaker 21 Right, Carla?

Speaker 21 Amazing.

Speaker 18 Wait, what was the last thing you said?

Speaker 19 He just what?

Speaker 2 Just fucking. Just fucking.

Speaker 19 Just fucking.

Speaker 17 Yeah.

Speaker 21 And I just want to say personally, I came on this podcast today to meet my spouse.

Speaker 18 This is technically work.

Speaker 5 This is technically work.

Speaker 21 It's going to be one of you. I only have one rose.

Speaker 3 Yeah.

Speaker 2 Yeah. I mean, so listen, Dove Charney, he didn't start life as this creepy dude, but growing up in Montreal, he was an unruly child and he went through a lot.

Speaker 2 Even from a young age, he was a troublemaker, anti-authoritarian, and he loved scheming.

Speaker 2 His parents also get divorced, which can be tough on a kid. Eventually, his parents decide to send him to boarding school in the U.S.

Speaker 2 That's where he gets a taste for American-made t-shirts like Haines and Fruit of the Loom, brands they don't yet have in Canada.

Speaker 2 He likes these USA-made shirts so much, he starts to smuggle them into Canada on visits home so he can resell them at a profit.

Speaker 25 So far, this all feels really relatable.

Speaker 17 Yeah, totally.

Speaker 3 Boarding school.

Speaker 19 Child of divorce.

Speaker 2 Child of divorce.

Speaker 2 Yeah, he takes them with him by train to avoid import fees which is like so smart but also kind of sketchy so far i'm a big fan sidebar though he does have an affinity for well-made clothing because his grandmother was a seamstress okay all right not me falling in love with this man

Speaker 2 so charni he's only 16 at this point but he and a friend start a business selling printed shirts and they make according to his buddy a few g's a night hawking them at places like concerts what was all these t-shirts do we know they're just like plain shirts that they send off to like little printing companies.

Speaker 2 So I think they change it to whatever the like event is that they're at.

Speaker 19 Oh, okay. That makes sense.

Speaker 2 Now they call their makeshift company American Apparel since their product is from America.

Speaker 2 Of course, selling unlicensed merch at concerts is illegal, and Charney does get arrested at least once when his schmoozing doesn't work on some cops.

Speaker 2 This doesn't seem to be the scared straight moment one would hope for. Charney goes to college at Tufts University, but he's so eager to start making real money.

Speaker 2 In 1989, he drops out of school with just one semester left. He's literally too cool for school.
So like how very tech startup CEO of him, very on trend.

Speaker 2 With $10,000 of daddy's money, nepotism, also on trend, Charney sets up shop in South Carolina where there's a strong textile industry and begins manufacturing t-shirts.

Speaker 2 Now at this point, it's just a wholesale business that sells blank teas to screen printers and uniform companies, but Charny's already hoping that one day he'll make the best t-shirts known to man.

Speaker 2 And because his grandmother was both a textile worker and an immigrant, he wants to do it humanely with fair wages and decent work conditions.

Speaker 18 I mean, that's a great goal.

Speaker 2 I've got a crush on Dove, literally.

Speaker 21 We need a Charny counter.

Speaker 5 Yeah, we need to.

Speaker 21 The amount of times we're going to say Charney today.

Speaker 2 Charney. There's so many times.

Speaker 2 So things go well for half a decade, and then a bit of geopolitics gets in the way.

Speaker 2 In 1994, the North American Free Trade Act, NAFTA for short, is signed into law by President Clinton. NAFTA dealt with something you might have heard a lot about recently, tariffs.

Speaker 2 And it basically got rid of a ton of them between US, Mexico, and Canada. Companies flee to Mexico and other places where it can cost a fifth or less than what it costs in the U.S.

Speaker 2 to produce clothing. And this decimates the Made in America textile and apparel industry.

Speaker 17 Whoa.

Speaker 2 So Charney's business in South Carolina isn't going quite as he'd hope. Now, on a trip to California, Charney just happens to run into some locally produced clothing factories, and it hits him.

Speaker 2 There's a market here that he can tap into. One where people want locally produced apparel, where they want locally produced everything.

Speaker 2 But he'll have to relocate to one of the trendiest and most expensive cities in the country where people can afford something made in America. And that's beautiful, sunny Los Angeles.

Speaker 2 It's a gamble, but because he can go broke here. But the upside, it's a party town.
And Charney finally feels liberated in la

Speaker 2 and at a halloween party he shows up naked and says that's his costume oh halloween is really where people start to unleash their worst desires for sure for sure

Speaker 21 actually this is just coming to me the first time i ever wore american apparel was for halloween oh look at that in high school you know in college i was closeted and for halloween i thought i would dress up

Speaker 17 as a hipster.

Speaker 21 So it was the first time I wore skinny jeans in American Apara.

Speaker 10 And I was like, guys, it's a joke, right?

Speaker 20 This is so funny.

Speaker 5 This isn't me.

Speaker 21 Imagine if I wore skinny jeans.

Speaker 15 I would never.

Speaker 2 Oh my God, gross.

Speaker 2 So this does like make me question, like, why did he get away with this kind of behavior before he was rich?

Speaker 19 I do think sometimes, like, people's like bold

Speaker 19 like energy tricks people for a minute because you're like, oh, wait, are they like a crazy artist or are they a predator? You just, you don't know until there's evidence.

Speaker 3 That's true.

Speaker 2 Audacity does get you pretty far.

Speaker 5 Yeah.

Speaker 2 Well, by 1997, Charney opens factories in downtown LA, paying workers well and offering decent benefits, which, of course, they love that.

Speaker 19 We love that.

Speaker 2 We love that.

Speaker 2 Post-NAFTA, a lot of U.S.-based companies try to save money by hiring cheap labor, usually undocumented workers, and paying them almost nothing.

Speaker 2 And Charney, he does hire undocumented workers as well, but he tries to treat them well and advocates for immigration reform to make life less challenging for these folks.

Speaker 21 Is Charney paying you?

Speaker 13 What's going on?

Speaker 18 Yeah, so far, this feels like a

Speaker 19 love letter to Charney.

Speaker 4 I know, I know.

Speaker 2 Well, that's just going to make the end of this even sweeter.

Speaker 17 Okay.

Speaker 2 By 2005, American Apparel is one of the fastest growing companies in the U.S.

Speaker 2 It's the mid-2000s and the sorry, Jared, the hipster movement is in full swing.

Speaker 4 This was your moment.

Speaker 2 Ethical clothing that lasts and is comfortable, it's in demand. And there's also these sexy ad campaigns, and American Apparel goes all in on those.

Speaker 2 As the adage goes, sex sells and ads help build buzz. So if the ethical fashion part of his business doesn't float your boat, you might be interested in the scantily clad, barely legal models.

Speaker 2 The brand is sleazy. It's male gazy, but you can still feel good about it? Sure.

Speaker 2 In some places overseas, a few of the pictures are even banned, but most people don't know which feminist philosophy applies here.

Speaker 2 Most thinkers can agree that advertisers have always used sex to sell things, but they can't decide if this is crossing a line or they at least can't bring themselves to say it without sounding old.

Speaker 19 It is confusing because you're like, I want, you know, we want to celebrate women's independence and like ability to choose to show their bodies, but yeah, I think it is like a little like tricky because they do look barely legal.

Speaker 19 And it's like, is this what they want?

Speaker 22 Yeah.

Speaker 2 And like you said, do they know what they're doing?

Speaker 4 Did they know beforehand?

Speaker 2 Meanwhile, inside the company, Charney's employees totally buy into the idea that, sure, capitalism is evil, but it's totally fine here at American Apparel.

Speaker 2 He prides himself on hiring cool young people. So everyone who works there thinks it's cool to work there.
His pitch is simple. It's not companies that suck, it's the people who run them.

Speaker 2 If you just ditch those pesky boomers, you get to have your cake and eat it too.

Speaker 25 Makes sense to me.

Speaker 19 I think young people can make shitty companies.

Speaker 19 It's possible.

Speaker 2 I think so.

Speaker 2 Yes. So from the outside, American Apparel, they have it all.
Well-made clothing, party vibes, and good business practices. City dwelling folks, they can't get enough.

Speaker 2 Sales, as a result, skyrocket, and Charney becomes the largest t-shirt manufacturer in America. He even starts opening stores all around the globe.

Speaker 2 And by 2004, Charney says his LA-based factory is making hundreds of millions of dollars a year.

Speaker 2 Unfortunately, Charney's revenues can't keep up with his inflated ego or his, you know, inflated trousers because by 2006, he's sued multiple times by former employees for sexual harassment.

Speaker 6 Oh, no.

Speaker 2 And there you go.

Speaker 19 Oh, no.

Speaker 4 Yeah.

Speaker 19 You mean the guy who wanted to have hot ladies around all the time was a creep?

Speaker 3 Hmm.

Speaker 4 Imagine that.

Speaker 2 There seems to be a pretty stark disconnect between what American Apparel's mission is supposed to be and the alleged conditions on the ground.

Speaker 2 Have you ever worked somewhere where everything in the workplace was a contradiction?

Speaker 21 I haven't worked in so long it's hard to say.

Speaker 4 You're like, I'm surviving on the lives.

Speaker 19 I just like to work, actually.

Speaker 2 I know. We're the weirdest people to ask that question.

Speaker 21 I've worked in retail and I've had a lot of jobs I didn't love. I had a phone thrown at my head.

Speaker 15 Did I deserve it?

Speaker 5 Maybe.

Speaker 1 Maybe.

Speaker 2 Well, like many startups, the hours at American Apparel can get a little grueling.

Speaker 2 Pretty sure this is the opposite of ethical workplace conditions, but maybe that ethos only applies for the production side of American apparel, where the textile workers are and not the corporate side.

Speaker 2 Because some of those employees say they are consistently working 15-hour days.

Speaker 2 Now, Charney himself also puts in those long hours. So he's like, I don't see a problem with this.
So how do you think Charny justifies or makes up for people working 15 hour days? What would you do?

Speaker 18 Parties?

Speaker 19 Is he throwing parties?

Speaker 2 Basically. It is basically an adult pizza party.
Sashir.

Speaker 21 You should open up a toxic workplace company.

Speaker 19 I know how to run a toxic business.

Speaker 23 Oh my God.

Speaker 4 Sashir's like, I'm ready.

Speaker 21 I was thinking, like, does he move the clocks, the hands on the clocks?

Speaker 2 Yeah, just he does love the scheming.

Speaker 3 Just a little bit of trickery.

Speaker 2 No, he, yeah, he buys the office food so his employees can avoid going out for lunch. And he buys vape pens for his staff so they don't need to go outside for smoke breaks.

Speaker 23 Wow.

Speaker 15 That's

Speaker 15 wild.

Speaker 2 It's wild. This guy thinks of everything.

Speaker 15 Yeah.

Speaker 2 But surely snacks and nicotine don't make up for the need to, I don't know, sleep or see your family.

Speaker 2 He even admits to denying workers days off for their birthdays.

Speaker 20 You're 30, grow up. Yeah.

Speaker 13 Get to work.

Speaker 18 Clock in.

Speaker 2 Yeah, they're like, hey.

Speaker 2 But if you know anything about startup culture, you know, like Hive Mind can be insane.

Speaker 2 Like these employees feel like they're a part of a community, a family, and they continue to give everything they've got. And Charney's argument boils down to this.

Speaker 2 See-through bodysuits will change the world.

Speaker 21 If you told that to me when I was 14, I'd be like, Yes, yes, yes, yes, more, more of those.

Speaker 2 More, exactly. It's very basic startup indoctrination.

Speaker 2 Yeah, everyone hired needs to sign confidentiality agreements and arbitration agreements that basically means they cannot take American apparel to court.

Speaker 2 That all disagreements need to be settled outside court by arbitration.

Speaker 15 Oh, no. No.

Speaker 1 Oh,

Speaker 15 okay. Well, that's all right.

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Speaker 2 Now, in 2007, the company goes public and it opens with a $400 million valuation.

Speaker 2 And then there's a smackdown on Charney from a very unlikely source, President Obama. Because in 2009, Obama enacts a crackdown on illegal immigration.

Speaker 2 They warn American Apparel that there's going to be an audit to see how many folks are undocumented and many of the immigrants in his workforce, they will have to go.

Speaker 2 Now, this is really triggering for Charney. At least, that's what he claims, because remember, his grandma was an immigrant textile worker.

Speaker 2 So, for him, the idea that he's not treating his employees well, it really hits home for him. But what can he do when public opinion isn't in his favor?

Speaker 2 He takes out ads in magazines, buys up billboards, puts up signs in American apparel stores, and leads protests against the immigrant crackdowns. And he calls this campaign, Legalize LA.

Speaker 2 Let's look at a photo. Do you remember these?

Speaker 18 I think I do, actually.

Speaker 2 Will you read the quote for the listeners?

Speaker 19 Immigration policy should be generous. It should be fair.
It should be flexible. With such a policy, we can turn the world and to our own past with clean hands and a clear conscience.

Speaker 2 JFK.

Speaker 2 That's who was quoted there.

Speaker 13 That's JFK?

Speaker 25 Yeah.

Speaker 23 Whoa.

Speaker 13 Here's the thing.

Speaker 10 I just, if this man just stopped sexually assaulting, everything would be fine.

Speaker 21 He'd be the hero of the planet.

Speaker 13 Yeah.

Speaker 21 He has to be the coolest guy in the world. Honestly, even like kind of finding a selfish loophole for supporting immigrants, I'm like, who cares?

Speaker 18 What?

Speaker 19 Yeah, who cares?

Speaker 18 At least it's go off.

Speaker 2 Well, despite the protests, 1,800 workers, a third of Charney's staff who don't have proper documentation, are fired at the behest of the government. Another 700 leave voluntarily.

Speaker 2 And since he can't legally give undocumented workers severance money, he gives them cash, some as much as $30,000 apiece. Oh my God.
I know. It's like everyone's,

Speaker 2 we were rooting for you. We were all rooting for you.

Speaker 21 This feels like an argument for sex robots. Like, if we could just get this man a sex robot, you know, keep him on track.

Speaker 18 Yeah, satisfy him in other ways.

Speaker 21 One for what's his name? Anthony Weiner.

Speaker 5 You know?

Speaker 21 Some of these guys, they have some good ideas and they have some bad ideas.

Speaker 21 It's like when you get a dog, like that food bowl that like takes longer to eat out of.

Speaker 18 Yeah, the slow feeder.

Speaker 21 It has a pocket for peanut butter.

Speaker 21 We need that for men with like good business ideas, but bad business practices.

Speaker 5 Yeah. Yeah.

Speaker 2 Slow feeders for men with ambition. Yeah.

Speaker 2 That's a really good business model. We should start that.

Speaker 5 Yeah.

Speaker 2 Now he can afford to dole out that much money because right now he is making a killing. The business is doing really well.

Speaker 2 What would you do with all of that money if you were all of a sudden a multi-millionaire?

Speaker 21 Cabazon Outlets.

Speaker 21 Have you been to the Cabazon Outlets?

Speaker 3 No.

Speaker 21 I cannot say this loud or clear enough. The Cabazon Outlets.

Speaker 20 Go.

Speaker 21 It is an outlet store in Palm Springs that has every major designer except for Hermes, Chanel, and Louis Vuitton.

Speaker 2 All the rest are there.

Speaker 21 And the deals are crazy. I went for the first time last week.

Speaker 21 I'm Cabazon-pilled. All I do is think about Cabazon.
I'm texting sales associates. I'm like, if I had 30K from Charney, if I got the Charney bump, the Charney check,

Speaker 21 I'm going straight to Cabazon.

Speaker 25 Bendy, St.

Speaker 21 Laurent, Lueve, Botega.

Speaker 5 That's where I'm headed.

Speaker 15 Wow.

Speaker 3 Well,

Speaker 2 Dove,

Speaker 2 he buys a house in the Hollywood Hills. I mean, you gotta.

Speaker 19 I mean, that's actually, I was like, I would buy homes.

Speaker 15 Exactly what I would do.

Speaker 2 That's what he does. Well, and since he's a middle-aged bachelor millionaire, he fills it with three things that middle-aged bachelor millionaires love.
His underlings, cute dogs, and hot models.

Speaker 22 Oh.

Speaker 2 One floor is for work, another is for pleasure. It's a CEO paradise and an employee hell, and employee hell.

Speaker 2 One thing that he does, though, sidebar, the company also eventually launches a line of doggy wear.

Speaker 4 Take a look. How cute.

Speaker 19 Puppy style. And then that dog is mounting the other one.

Speaker 19 How are they sexualizing dogs?

Speaker 3 They are.

Speaker 20 Oh, my God.

Speaker 19 Leave the dogs out of it.

Speaker 13 Oh, my God.

Speaker 21 That Shiba Inu is getting choked out.

Speaker 21 Also, I love like the header normativity there of like the blue and the pink.

Speaker 13 Yeah, yeah.

Speaker 21 And the blue is on top, just as God intended.

Speaker 19 And the pink is just taking it.

Speaker 1 Yeah, yeah.

Speaker 2 Now, with sudden success and his own party mansion, Charney becomes a minor celebrity.

Speaker 2 Okay, what do you remember about celebrity culture in the mid-aughts?

Speaker 21 It was perfect. No notes.

Speaker 5 No one got hurt.

Speaker 20 Everyone got what they asked for.

Speaker 19 We got what we deserved. Yeah.

Speaker 13 There we go.

Speaker 18 Yeah.

Speaker 19 I feel like it was like heiresses and like,

Speaker 19 you know, I guess people being famous for being famous. Yeah.
And clubbing.

Speaker 2 And scandal.

Speaker 4 That's, I mean, like, that was the thing.

Speaker 2 Reality TV is at its peak and people are getting so rich off of controversy. I mean, think about how Paris Hilton launched her career or Kim Kardashian.

Speaker 2 Everyone had a sex tape or at least some leaked naked photos.

Speaker 17 So,

Speaker 2 why not good old boy Charney?

Speaker 2 American Apparel's marketing department actually launches a campaign featuring the CEO's

Speaker 2 member of the board. Let's take a look.
Don't worry, he's wearing boxers.

Speaker 18 Okay,

Speaker 19 well, you know, is that him?

Speaker 2 For our listeners only,

Speaker 2 we're looking at Charnie's lower half. It's wrapped in blue undies, and there's a scantily clad model, mid-mount.

Speaker 2 So,

Speaker 19 and his pubes are peeking out.

Speaker 17 Yeah,

Speaker 5 you peek.

Speaker 2 Yeah, he's working for himself.

Speaker 19 He needed friends, he needed some actual friends of his age, probably, who could be like, hey, you know, that's a personal photo. That's what, you know, you keep that to yourself.
Keep it in an album.

Speaker 19 You could maybe send it to your friends. I think we'd find it weird, but that's like not for public

Speaker 2 viewership.

Speaker 21 Yeah, he obviously wanted to be famous.

Speaker 5 Yeah, literally. Yeah,

Speaker 2 does this make you want to buy a t-shirt or leggings or even underwear?

Speaker 15 No, it doesn't. No.

Speaker 2 Well, here's where it gets really weird. And I mean, really weird.
Unlike the 2010s, when powerful men started to hide the fact that they were predators, it's the odds.

Speaker 2 And Charney wants the controversy. So at his own direction, his employees actually create fake online aliases to spread rumors that Charney sexually assaults his models.

Speaker 19 That's an interesting tactic.

Speaker 21 It's kind of genius. Because then you can debunk seven of them and go, look, they're all fake.

Speaker 2 Yeah. Yeah.
Hiding in plain sight.

Speaker 21 Interesting.

Speaker 2 It's weird because he does want this reputation. In a lengthy and glowing profile for Jane magazine, Charney literally masturbates in front of a journalist

Speaker 2 multiple times.

Speaker 3 No.

Speaker 2 Walks around the the office in his underwear and freely admits to having sex with his employees. No.

Speaker 2 Now, so strange because in today, immediate dumb.

Speaker 19 Absolutely.

Speaker 2 He would be catapulted to the sun.

Speaker 2 But this only creates a brief outrage cycle in the zeitgeist, but it also helps perpetuate the myth that Charney is dangerous and doesn't care if he committed crimes.

Speaker 2 And that's apparently fine back then.

Speaker 21 Imagine having like a multi, multi, multi, hundred, hundred million dollar successful successful business and not just like enjoying that quietly

Speaker 18 like why

Speaker 25 none of this was necessary no just be so rich you can you know how many times you could go to the capazon outlet

Speaker 6 stop

Speaker 2 literally every day oh i know while the company's marketing team intentionally perpetuates this story that Charney is a sexual predator, he is, he's real happy with himself.

Speaker 2 But prepare for a huge twist. I know, it's hard to imagine.
But it turns out he is accused of sexually harassing people for reals. It's not just a weird marketing scheme.

Speaker 2 Now, we have to bookend this whole section with our standard legal caveat. Charney has never been found guilty of these crimes or admitted to any wrongdoing.

Speaker 2 But according to the folks who worked for him, Charney would get into consensual relationships with models just old enough to give consent.

Speaker 2 They say he'd shower them with gifts and good times, but according to inside accounts, because they relied on him for money and sometimes even work visas, they'd be terrified to stop trading in sexual favors.

Speaker 2 It's like, sure, we can break up, but you'd get deported.

Speaker 19 Yeah.

Speaker 2 Now, the more layers of Charney's life that are pulled away, the more disturbing details emerge.

Speaker 2 Gawker reports that potential store employees have to include photographs with their applications, and Charney personally scrutinizes staff photos to pick out any he deems fireable based on appearance.

Speaker 4 Also not cool today.

Speaker 2 This seems typical with fashion brands. If you haven't listened to our episode on Abercrombie, go check it out.
A lot of parallels to unpack there.

Speaker 2 To provide cover for all of this behavior, Charney builds a counterculture persona fighting against the surveillance state. So if anything comes to light about him, it's not really news.

Speaker 2 After all, what do you expect from this admitted party animal? So he's just kind of getting away with it at this point.

Speaker 5 Yeah.

Speaker 2 But the years go by, and it's shaping up to be a death by a thousand cuts.

Speaker 2 There is a long list of complaints eventually levied against Charny, whose management style seems to be chaotic, erratic, and blatantly abusive.

Speaker 2 So buckle in, folks, because I'm about to hit you with a long list of Charny's alleged misdeeds told over the years by ex-employees. They say at least once he rubs dirt into someone's face.

Speaker 2 They say he routinely screams at managers if their stores are dirty, making them cry.

Speaker 2 He threatens to slap his employees and at least once slaps his own face instead to show a worker he's insane, I guess.

Speaker 2 He also pretends to jerk off on his graphic designer at some point because he doesn't like his work.

Speaker 2 Well, that one was just a joke.

Speaker 19 Yeah, we know he's willing to really do it. So the fact that he didn't do it, he saved, you know.

Speaker 2 Now, the verbal abuse is another level. He calls people names, especially his female staff.
Things like, this is in quotes, slut, whore, slave, and or bitch.

Speaker 21 I'm wondering if he, like, something happened to him.

Speaker 19 Yeah, what turned? He started off so good.

Speaker 13 At what point are you just, like...

Speaker 21 rubbing dirt in in an employee's face and wondering, why am I doing this?

Speaker 6 I know.

Speaker 18 Like, does that not ever.

Speaker 19 How did we get here?

Speaker 2 Also, let's remember, like, you're selling t-shirts.

Speaker 19 Like, yeah, all this for t-shirts.

Speaker 2 All this for t-shirts.

Speaker 2 Well, here is a video of Charney yelling at his corporate staff, and he's playing a game with them called quit or submit, where they have to fall in line or they can lose their jobs. Quit or submit.

Speaker 23 We're going to play a game on it. Bang.

Speaker 2 Let's go. Quit or submit.
We're going to do 30 spring reports tonight.

Speaker 22 We're going to lay them out here. I ain't fighting anywhere too with them.
I'm standing ready to do that.

Speaker 21 No.

Speaker 20 No.

Speaker 21 Okay, this is the worst person on the planet.

Speaker 19 Yeah, I don't like that.

Speaker 21 Good on whoever filmed that.

Speaker 2 Yeah, I know. I would definitely say something to him in this moment.
So, like, yeah, really good on the person pulling out their phone to get that moment on film.

Speaker 18 I don't know if you can say anything to him.

Speaker 19 He looks so crazy.

Speaker 21 He's probably hiring young people, like people you can bully and intimidate.

Speaker 21 And like, I remember when I like first started just like working jobs I had experiences like that I literally just thought that was normal yeah and you just let it happen and then you kind of like later in life you go oh god if I only knew I wish I could go back and like really tell them really give them the business I also wonder what what was the like beginning of the end for these employees because he was like running rampant for a while like for a long time is it like when they moved into his house or like when when were they like you know what when they're invited to floor two yeah yeah like this actually doesn't feel like work anymore.

Speaker 22 Yeah.

Speaker 2 Well, Charney, he thinks his unhinged behavior is all part of being a great boss, which, no, it isn't. So at this point, I got to ask,

Speaker 2 how do you handle Charny? Like, what should happen to him at this point?

Speaker 21 I think 7,000 birds swarming above his head.

Speaker 21 One by one.

Speaker 20 Peck.

Speaker 15 Peck.

Speaker 26 Peck.

Speaker 18 Oh, my goodness.

Speaker 19 This is like a medieval torture technique.

Speaker 13 This is what I think.

Speaker 18 Wow.

Speaker 19 I was going to say jail, but I also like that.

Speaker 2 Well, we're somewhere in the middle because karma, karma is what comes in and does its magic.

Speaker 2 The undocumented immigrant firings in 2009 had set off a chain reaction that eats away at the company's bottom line. The stock price plummets.

Speaker 2 And now it's time to test Charney's commitment to those fair wages and U.S.-based manufacturing because his investors want him to move production somewhere else, like Vietnam, where overhead is only a fourth of what it would be in the U.S.

Speaker 2 But that would obviously go kind of against the whole made locally thing. So any ideas? Like if you were a corporate baddie, what would you do to fix this little

Speaker 17 problem?

Speaker 21 I would print more money.

Speaker 21 I will never, never understand why that doesn't work. And you can say inflation to me as much as you want.

Speaker 6 Print more money.

Speaker 19 Maybe send Americans to the overseas factories than it's American-made.

Speaker 2 Well, instead of moving out of the country, Charney hires some consultants to improve their current factory setup.

Speaker 2 After identifying some inefficiencies in the downtown LA factory, Charney decides to build a new one about 20 miles southeast in La Morado.

Speaker 2 And the company also hires a new CFO, a man named John Luttrell, a stuffed shirt, a fuddy-duddy, a square, you know, the complete opposite of Charney. He's going to oversee this new plant.

Speaker 2 Perfect compromise, right?

Speaker 2 With a new, more efficient factory and a responsible person leading the way, American apparel will make up for the lost profits following the immigration crackdown without compromising its mission.

Speaker 2 But no, it won't. It's a disaster.
The logistics software doesn't work. Merchandise gets lost in the system.

Speaker 2 It's left undelivered and just sitting at the warehouse, which is literal money down the drain. And American Apparel's problems will only get worse before they get better and then worse again.

Speaker 2 But Charny, he's a man. He's not going to go down without a fight.
So to save his company, Charney does a very clichéd CEO thing and moves into his new factory.

Speaker 2 Contractors convert a men's restroom into Charny's private bathroom and build in a shower. He doesn't leave the factory.
He stays there 24/7.

Speaker 2 And according to his former staff, his already frail mental health takes a nosedive.

Speaker 19 Well, of course.

Speaker 2 But it's not just the investors he should be worried about. It's those cool, hot young people obsessed with ethical manufacturing that he continues to treat worse and worse.

Speaker 2 And before long, they wake up and they realize their boss isn't idealist. He's just an asshole.
And in 2011, a few more of them sue Charney for sexual harassment.

Speaker 2 There were two suits filed against him in one month.

Speaker 17 Oh, God.

Speaker 2 One is from a group of five female employees claiming Charney created an unsafe environment. The other is filed by a woman who says Charney forced her to be his sex slave for three years,

Speaker 2 starting when she was 19.

Speaker 2 Now, obviously, we have to mention that all of these cases were either thrown out by the courts or went through internal arbitration because the employees had signed documents that revoked their legal claims against the company.

Speaker 19 Wait, is this because of that thing that they signed that was like they can't talk badly about the company outside of the company?

Speaker 2 Basically, basically.

Speaker 19 That's smart on Charney's part, I guess.

Speaker 2 Read your contracts, everybody. So you'd think this would be the end of him, right?

Speaker 2 But no, of course not. He's still important to the brand and American Apparel is still too powerful.

Speaker 2 The lawsuits are forced into arbitration, they're settled, dismissed, out of the public eye, and Charney was cleared of all sexual harassment in the lawsuits, and of course, never admits to that wrongdoing.

Speaker 2 That doesn't mean he's cleared in the public consciousness. A lot of CEOs are known to be horrible humans, and they get away with it, as long as the profits roll in.

Speaker 2 But American Apparel stock prices have been steadily declining since the company went public. It's been six straight years of profit loss.
In 2013 alone, American Apparel hemorrhages $106 million.

Speaker 2 Well, American Apparel, they just need to get their best and brightest to figure out an edgy product line or a fresher marketing campaign to win back the consumers.

Speaker 2 And that would be nice, but this is where Charney's personality really tanks the company. Due to his reputation, there's an American Apparel brain drain.

Speaker 2 And the best and the brightest do not want to work there.

Speaker 2 In late 2013, American Apparel is running out of money, and they don't have enough cash on hand to pay off their $15 million in debt to continue production.

Speaker 2 So the investors want a solution, ASAP, and Charney thinks he's giving it to them. He's been working overtime to fix the distribution problem, and he makes a move to oust Luttrell, the old school CFO.

Speaker 2 Well, Luttrell does not want to go. So he drafts a secret plan for the board to oust Charney and then sell the company.
Well, Lutrell types out his plan and tries to print himself a copy,

Speaker 3 but

Speaker 2 he prints the plan without knowing which printer he sends it to.

Speaker 19 That's really funny.

Speaker 2 I just imagine him like running around the building to every printer being like, oh my gosh, where did this go?

Speaker 21 That's like one last glimmer of relatability.

Speaker 22 Literally.

Speaker 2 So someone finds it and rushes it to Charny.

Speaker 19 Oh, who's the snitch?

Speaker 2 Someone's a snitch.

Speaker 2 So Charney gets to read Luttrell's memo where Luttrell calls Charney, quote, completely incapable of managing American apparel. But Charney, he's not worried.

Speaker 2 The board is made up of people who he hired. So why would they get rid of him?

Speaker 2 Because they love money.

Speaker 5 And

Speaker 2 at the end of the company's annual meeting, the board members ambush Charney and give him an ultimatum.

Speaker 2 They can publicly fire and embarrass embarrass the crap out of him or he can resign and stay on as a consultant so charni's between a rock and a hard place either way he's going to lose control of the company he started as a teenager

Speaker 13 what do you think he should do i think he should resign quietly quietly and be a consultant yeah yeah pivot to music

Speaker 19 which is also what people in that time were doing yes they were he needs his stars are blind

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Speaker 2 Well, to make sure Charney understands his place, the board makes it explicit that they know where his skeletons are buried.

Speaker 2 Turns out, they're on his work computer, where he keeps a staggering amount of pornography and incriminating content.

Speaker 2 Now, Charney stalls, which doesn't work, and the board goes live with his immediate suspension. Lutrell becomes interim CEO.

Speaker 2 In the news, board members claim they're disturbed by new information about Charney's character.

Speaker 2 When talking to the the press, the co-chairman, Alan Mayer, says,

Speaker 2 The independent directors became aware of some facts we'd been previously unaware of. The only right and sensible thing to do at that point was to ask Dove to leave.

Speaker 2 Now, they don't say what these facts are, but they've started an investigation into Charney's misconduct.

Speaker 2 It seemed pretty out in the open to me, but who knows?

Speaker 19 Yeah, it doesn't seem like new information.

Speaker 2 So, game over for good old Dove, right?

Speaker 2 Except he's wascally.

Speaker 2 Put on your exiled CEO caps for a sec and see if you can guess what his next move is.

Speaker 19 He sends the dogs.

Speaker 19 He releases the hounds onto the factory.

Speaker 21 The dogs from the billboard?

Speaker 22 Yes.

Speaker 19 They're all horned up and ready to attack.

Speaker 2 He does do a hostile takeover.

Speaker 6 Whoa.

Speaker 13 He's living in a TV show.

Speaker 19 I literally. Truly.

Speaker 2 So he already owns 27% of the stock. For the rest, Charney finds a hedge fund with a bland name called Standard General, and they lend him $20 million.

Speaker 2 So with that money, Charney buys up as much American apparel stock as possible so he can remove the board of directors and reinstall himself as CEO.

Speaker 5 Oh, wow.

Speaker 2 That's it.

Speaker 25 Can anyone do that?

Speaker 21 Can you just buy enough of a stock and then be like, I'm in charge now?

Speaker 2 Basically.

Speaker 21 Can someone do that for like Tesla?

Speaker 18 Yeah, I wonder.

Speaker 2 It'd be a lot of money. Got to find someone real rich or a bunch of rich people.

Speaker 19 Yeah, but their stock is getting quite low.

Speaker 18 Yeah.

Speaker 18 We can pitch it.

Speaker 17 Yeah. Yeah.

Speaker 21 We'll go dash on Tesla.

Speaker 13 Comedian's Jared Goldstein and Sashira made up.

Speaker 2 So, yeah, I mean, like, technically, this could get him everything he wants, but unfortunately, that doesn't work out for him because now this hedge fund owns his butt.

Speaker 2 The agreement Charney just signed stipulates that if American Apparel fails as a company, Charney will owe Standard General $20 million.

Speaker 2 Plus, in the meantime, he'll owe them interest on the loan, which is about $9,000 a day.

Speaker 22 Boy.

Speaker 3 There's a lot of pressure on it.

Speaker 18 Yep.

Speaker 2 So without skipping ahead to the company's collapse, what do you think the first thing that goes wrong in Charny's attempt to regain control of the company?

Speaker 10 Well, first he wakes up, diarrhea.

Speaker 21 He's like, oh, not today.

Speaker 2 Yeah, he just doesn't get control. His little plan, it just doesn't work.

Speaker 2 According to Charny, the head of the hedge fund thinks Charny's reputation is a problem and says he can pick the next CEO and then she will be his puppet.

Speaker 2 So he doesn't get much of a choice here. He just has the illusion of one.
So he suggests a friend of his for CEO, a woman named Paula Schneider, thinking she'll be easy to control, right?

Speaker 2 Well, Schneider immediately sides with the hedge fund and the old board and refuses to follow Charney's demands.

Speaker 19 That's really funny.

Speaker 2 I know. So funny.
The new leadership then launches a pro-women campaign.

Speaker 19 Yeah, that's a good rebrand.

Speaker 2 Yeah, good rebrand. They also do something unexpected.
They blur nipples and erase body hair on American Apparel's website.

Speaker 2 But instead of playing into the pro-woman of it all, this move causes a commotion from the sex positive contingent.

Speaker 2 Now, Schneider and the board are in trouble with the customer base, and American Apparel continues to spiral.

Speaker 19 They were so close.

Speaker 18 They almost had it.

Speaker 27 Just keep blurring the nipples.

Speaker 15 Don't stop.

Speaker 2 So Charney starts using new American apparel policies against them, supporting a free the nipple campaign in opposition to the censoring of the website's pictures.

Speaker 19 Is that where that started? Free the nipple?

Speaker 4 No, no, no.

Speaker 2 He was just, that was a thing. So he was using that and being like, look at that.
That's good.

Speaker 19 American apparel bad. We should also, yeah.

Speaker 21 Wouldn't be surprised if he was behind free the nipple.

Speaker 2 Right? Little mastermind that he is.

Speaker 21 In that same sort of legalized la way

Speaker 2 uh rumors also start circulating that his this new american apparel will move production to a cheaper country which lights a fire under the workers allowing charney to lead them in a protest and at one such protest a pinata shaped like paula schneider gets destroyed oh my god that's petty very petty and personal So they're mad.

Speaker 2 In 2016, after 20 months of fighting in court, Charney loses his lawsuit to win back American Apparel. Now, none of this commotion helps either the leadership nor Charney.

Speaker 2 So soon after, unable to pay its debts or get new loans, American Apparel files for bankruptcy. And thousands of workers lose their jobs.
The company gets delisted from the New York Stock Exchange.

Speaker 2 And Charney owes Standard General $20 million.

Speaker 23 Wow.

Speaker 2 So huge American companies like Amazon tried to buy it up. Ironically, a Canadian company called Gilden Activewear buys it at auction for $88 million.

Speaker 2 And American Apparel becomes an online store with no affiliation to Charney.

Speaker 21 We should be able to do this with like the Instagram accounts of like disgraced people.

Speaker 22 Yeah.

Speaker 19 Just buy their Instagram account. Yeah.

Speaker 25 You know, they got a big following. Someone should be able to pay for that.

Speaker 19 Utilize it. That's true.
That is true.

Speaker 25 What's happening with Diddy's account right now?

Speaker 25 That's millions of,

Speaker 21 you know, watchers.

Speaker 13 Consumers.

Speaker 2 So let's do a little, where are they now? Charney is many things, a creep, a perfect candidate for anger management, and also a person who doesn't know when to give up.

Speaker 2 Having lost his life's work and his social life all at the same time, he immediately launched a comeback.

Speaker 2 In 2017, he started LA Apparel, basically the same deal as the original American Apparel, except now everyone knows to be wary of him.

Speaker 2 Since all of his wealth evaporated with American Apparel's bankruptcy, he ended up refinancing his mortgage and Airbnbing rooms in his Silver Lake mansion to cover expenses.

Speaker 2 In a 2023 article, Rolling Stone reported that several disgraced dudes live in the mansion, including Milo Yiannopoulos, Ian Connor, and Kanye West.

Speaker 2 They're just roommates, guys.

Speaker 19 That's really funny.

Speaker 21 Who is washing the dishes?

Speaker 13 Nobody.

Speaker 19 Yeah, I mean, just screaming the whole time.

Speaker 22 Yeah.

Speaker 2 They're like cleaning is such beta behavior.

Speaker 19 Yeah, if I didn't think they'd needed to just be like, you know, locked away somewhere, I would want cameras there. I kind of want to see this reality show.
What it looks like.

Speaker 21 Big disgraced brother.

Speaker 25 Yeah.

Speaker 2 So good.

Speaker 2 In March of 2020, during the COVID pandemic, Charney did a good thing and jumped into manufacturing masks during a shortage. By May, they sold half a million masks.

Speaker 2 But despite certain precautions, the factory was later found to violate health guidelines. For example, they were using cardboard barriers instead of social distancing.

Speaker 2 Around 300 people got sick that summer before a mandated temporary closure. At least four people died.

Speaker 6 Oh, no.

Speaker 2 So so much for looking out for textile workers. Yeah.
And it gets worse somehow. In 2023, Rolling Stone published a piece detailing Charney's involvement with Yeezy.
Kanye West's clothing brand.

Speaker 2 He was hired to be its CEO in 2023, and together they planned to release Yeezy's White Lives Matter t-shirts.

Speaker 2 Yikes. Charney did eventually back out, but again,

Speaker 2 yikes.

Speaker 19 That's so funny that Charney was like, you know what? This is too far for me.

Speaker 15 Like, you know what?

Speaker 19 I know I've been crazy for decades, but like, this actually is like, This is where I draw the line.

Speaker 2 But I can't help but thinking it probably wasn't what they said. It was probably the quality of the t-shirts.

Speaker 18 Yeah, he's like, I can say whatever.

Speaker 19 Yeah, white lives matter. Fine.
I just, I don't like how they're sewn. The threading looks really bad.

Speaker 13 It looks really bad.

Speaker 2 They're not buttery soft.

Speaker 22 Yeah.

Speaker 2 So here on the big flop, we try so, so hard to be positive people and end on a high. So are there any silver linings that you can think of that came about from Doug Charney and American Apparel?

Speaker 13 LA Apparel.

Speaker 20 Who doesn't love LA apparel?

Speaker 2 There we go.

Speaker 19 I guess that it's nice to know that, like,

Speaker 19 no matter what Venture Charney's doing, it will end. Like, he did, like, the karma keeps following him.

Speaker 18 The reputation

Speaker 2 precedes him consistently.

Speaker 19 So.

Speaker 21 But you always hear, like, going bankrupt, it's like, it's like a tax move and like nothing really happens.

Speaker 10 So I just wonder, like, is he rich? Where is he?

Speaker 19 Yeah, does he still owe $20 million?

Speaker 21 To owe someone 20 million dollars as a person not a business you're just gonna like you're gonna take that up with jesus christ like there's no other what are you gonna do i can't take it i can't pay you yeah you're not gonna get that like i'm i'm gonna get lunch today i don't know what to tell you like i'm going to panera babe i i

Speaker 25 i don't have it

Speaker 2 So now that you both know about the wild antics of American Apparel's Dove Charney, would you consider this a baby flop, a big flop, or a mega flop?

Speaker 21 The middle one.

Speaker 19 I think a mega flop because it just flopped so many times in so many ways.

Speaker 19 There are multiple flops happening.

Speaker 4 All avoidable.

Speaker 2 Well, thank you so much to our fashionable guests, Sashir Zemeda and Jared Goldstein, for joining us here on the big flop. And of course, thanks to all of you for listening and watching.

Speaker 2 If you're enjoying the show, please leave us a rating and review. And if you're joining us on our YouTube channel, please like and subscribe.

Speaker 2 We'll be back next week with another flop that surprisingly taught me a little bit of HTML coding, I know. That's right, besties.
I'm talking about MySpace.

Speaker 4 Bye.

Speaker 21 Bye. Bye.

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Speaker 2 The Big Flop is a production of Wondery and At-Will Media, hosted by Misha Brown, produced by Sequoia Thomas, Harry Huggins, and Tina Turner. Written by Anna Rubinova and Luke Burns.

Speaker 2 Engineered by Zach Rapone. With support from Andrew Holtzberger.
The video podcast is edited by Olivia Vessel. Managing producer is Molly Getman.

Speaker 2 Executive producers are Kate Walsh and Will Malnotte for At Will Media. Legal support by Carolyn Levin of Miller, Korzynik, Summers, and Raymond.

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