The Big Flop - Unzipping American Apparel with Sasheer Zamata and Jared Goldstein | 86

Episode Date: May 5, 2025

In the early 2000s, American Apparel was the coolest kid on the block, slinging ethically-made tees and scandalous billboards. But founder Dov Charney's penchant for office orgies and nude photoshoots proved too spicy for Wall Street, turning his sweatshop-free dream into a nightmare of lawsuits, bankruptcy, and one very public walk of shame.Sasheer Zamata and Jared Goldstein join Misha to uncover the almost naked truth behind American Apparel.  Be the first to know about Wondery’s newest podcasts, curated recommendations, and more! Sign up now at https://wondery.fm/wonderynewsletterListen to The Big Flop on the Wondery App or wherever you get your podcasts. You can listen early and ad-free on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. Start your free trial by visiting wondery.com/links/the-big-flop/ now.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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American Apparel says its decision to oust its controversial chief executive, Dov Charney, was linked to alleged misconduct. He has this crazy theory that age is the new class. People said that you were shooting models who were too young. Some say those ads crossed the line and that the CEO did too. At work, in his underwear. 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. Looking for the ultimate online casino experience? Step into the BedMGM Casino app, where every

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Be protected. Be Zen. From Wondery and Atwill Media, this is The Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time. I'm your host, Misha Brown, social media superstar and aspiring corporate baddie, at your bestie Misha. And today we're talking about the rise and fall of American Apparel.

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 Sasheer Zameda. Hello. Hi. Thanks for having me. So exciting. From Action Park to American Apparel, you really are very verse. Ha ha ha. Very verse, yeah.

We're talking about all the flops. All the flops. 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.

Hi, what's up? Isn't it such a little tight rope to walk every time you have to introduce people? Oh, definitely. Yeah. I know. We're so talented. Yeah. It's a skill. The things we can do. Okay, so here's a question.

When I say American Apparel Billboard, what comes to your mind? Sluts. 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? You know, the eyes are glossy. Yeah, a lot of them looked surprised that they were on a billboard in the photo. Yeah, they got caught doing something. And honestly with this story, that's a fair question to ask. So yes, those infamous ads are the brainchild of Dove Charney, the founder and former CEO of American Apparel.

I describe him as a gregarious party animal with a short fuse. This textile entrepreneur loves trouble and has made a staggering amount of avoidable mistakes, leading to legal trouble, boardroom drama, and public excoriation. 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. Someone we talked to said Dove Charney is very likable. He's just not a normal human being. Was that my mother? In the fashion business, entertainment business, women are important to have around.

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. Religion freaks me out, man. I just believe in fucking. Right, Carla? Amazing. Wait, what was the last thing he said?

He just what? Just fucking. Just fucking. Just fucking. Amazing. Wait, what was the last thing he said? He just what? Just, just fucking. Just fucking. Just fucking. Yeah. And I just want to say personally, I came on this podcast today to meet my spouse. This is technically work. This is technically work.

It's going to be one of you. I only have one rose. Yeah. 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. Even from a young age, he was a troublemaker, anti-authoritarian, and he loves scheming. His parents also get divorced, which can be tough on a kid. Eventually, his parents decide to send him

to boarding school in the US. That's where he gets a taste for American-made T-shirts like Hanes and Fruit of the Loom, brands they don't yet have in Canada. 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. So far this all feels really relatable.

Yeah, totally. Boarding school. Child or divorce. Child or divorce. Yeah, he takes them with him by train to avoid import fees, which is 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. So Charney, 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 on these T-shirts, do we know? They're just like plain shirts that they send off to like little printing companies.

So I think they change it to whatever the event is that they're at. Oh, okay. That makes sense. Now, they call their makeshift company American Apparel since their product is from America. 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. 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, 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. 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. Now at this point it's just a wholesale business that sells blank tees to screen printers and uniform companies, but Charney's already hoping that one day he'll make the best t-shirts known to man 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.

I mean, that's a great goal. I've got a crush on Dove, literally. We need a Charney counter. Yeah. The amount of times we're going to say Charney today. Charney. There's so many times. So things go well for half a decade and then a bit of geopolitics gets in the way.

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. 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 cost in the US to produce clothing. And this decimates the Made in America textile and apparel industry. Whoa.

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

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, no, in college, I was closeted and for Halloween, I thought I would dress up as a hipster. So it was the first time I wore skinny jeans in American Carol. And I was like, guys, it's a joke, right? This is so funny. This isn't me.

Imagine if I wore skinny jeans. I would never. Oh my God, gross. Gross. Yeah. So this does like make me question like, why did he get away with this kind of behavior before he was rich? I do think sometimes like people's like bold, like energy tricks people for a minute because you're like, oh, are they like a crazy artist or are they a predator? You just you don't know until there's evidence. That's true. Audacity does get you pretty far.

Yeah. Well, by 1997, Charney opens factories in downtown LA, paying workers well and offering decent benefits, which of course they love that. We love that. We love that. Post-NAFTA, a lot of US-based companies try to save money by hiring cheap labor, usually undocumented workers,

and paying them almost nothing. 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. Is Charney paying you? What's going on? Yeah, so far this feels like a love letter to Charney.

I know, I know. Well, that's just going to make the end of this even sweeter. Okay. By 2005, American Apparel is one of the fastest growing companies in the US. It's the mid 2000s and the, sorry Jared, the hipster movement is in full swing. This was your moment. 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. 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? The brand is sleazy, it's male gaze-y, but you can still feel good about it? Sure. In some places overseas, a few of the pictures are even banned, but most people don't know which feminist philosophy applies here. 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.

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. And it's like, is this what they want? Yeah. And like you said, do they know what they're doing? Did they know beforehand? 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. 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. If you just ditch those pesky boomers, you get to have your cake and eat it too. Makes sense to me. I think young people can make shitty companies. It's possible.

I think so. 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. Sales, as a result, skyrocket and Charney becomes the largest t-shirt manufacturer in America. He even starts opening stores all around the globe. And by 2004, Charney says his LA-based factory is making hundreds of millions of dollars a year. Unfortunately, Charney's revenues can't keep up with his inflated ego or his inflated trousers

because by 2006, he sued multiple times by former employees for sexual harassment. Oh no. And there you go. Oh no. Yeah. You mean the guy who wanted to have hot ladies around all the time was a creep? Hmm, imagine that.

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. Have you ever worked somewhere where everything in the workplace was a contradiction? I haven't worked in so long, it's hard to say. You're like, I'm surviving on the vibes. I just like to work, actually.

I know, we're the weirdest people to ask that question. 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. Did I deserve it? Maybe. Maybe. Well, like many startups, the hours at American Apparel can get a little grueling. 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, because some of those employees say they are consistently working 15-hour days. 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 Charney justifies or makes up for people working 15-hour days? What would you do? Parties? Is it throwing parties? Basically. It is basically an adult pizza party.

Sashir, you should open up a toxic workplace company. I know how to run a toxic business. Oh, my God. Sashir's like, I'm ready. I was thinking, like, does he move the clocks, the hands on the clocks? Yeah, just he does love the scheming. Just a little bit of trickery. No, he, yeah, he buys the office food 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.

Wow. That's wild. It's wild. This guy thinks of everything. But surely snacks and nicotine don't make up for the need to, I don't know, sleep or see your family. Mm-hmm. He even admits to denying workers days off for their birthdays. Ah! Ah, you're 30. Grow up. Yeah.

Get to work. Clock in. Yeah, they're like, hey. But if you know anything about startup culture, you know, like, hive mind can be insane. 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. See through body suits will change the world.

If you told that to me when I was 14, I'd be like, yes, yes, yes, yes, more, more of those. Yeah, exactly. It's very basic startup indoctrination. Yeah. Everyone hired needs to sign confidentiality agreements and arbitration agreements that basically means they cannot take American apparel to court,

that all disagreements need to be settled outside court by arbitration. So. Oh no. No! Ooh. Okay. Well, that No. Oh. Okay. Well that's. All right.

The wheels are falling off on this business. Everyone's got a pro. Need tires? I've got a pro. Car making a weird sound? I've got a pro. So who's that pro? The pros at Tread Experts.

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This assailant pulls out a weapon and starts firing at him. We're talking about the CEO of the biggest private health insurance corporation in the world. And the suspect. He has been identified as Luigi Nicholas Mangione. Became one of the most divisive figures in modern criminal history was targeted premeditated in Minnesota terror. I'm Jesse Weber host of Luigi produced by law and crime and

twist this is more than a true crime investigation we explore a uniquely American moment that could change the country forever. The people to a true issue. American moment that could change the country forever. He's awoken the people to a true issue. I mean maybe this would lead rich and powerful people to acknowledge the barbaric nature of our health care system.

Listen to law and crimes Luigi exclusively on one degree plus enjoying one degree plus in the one degree at Spotify or Apple podcasts. Now, in 2007, the company goes public and it opens with a $400 million valuation. 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. 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. Now, this is really triggering for Charney, at least that's what he claims, because remember his grandma was an immigrant

textile worker. 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? 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. Let's look at a photo. Do you remember these? I think I do, actually. Will you read the quote for the listeners? 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 conscious. JFK. That's who was quoted there. That's JFK? Yeah. Here's the thing. If this man just stopped sexually assaulting, everything would be fine.

He'd be the hero of the planet. He used 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? What? Yeah, who cares? At least it's... Go off. Well, despite the protests, 1800 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, and since he can't legally give undocumented workers severance money, he gives them cash, some as much as $30,000 a piece. Oh my God. I know, it's like we're everyone's, we were rooting for you, we were all rooting for you.

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. Yeah, satisfy him in other ways. This feels like an argument for sex robots. Like if we can just get this man a sex robot, you know, keep him on track. Yeah, satisfy him in other ways. One for what's-his-name, Anthony Weiner. Some of these guys, they have some good ideas and they have some bad ideas. It's like when you get a dog, like that food bowl that like takes longer to eat out of. Yeah, the Slow Feeder. It has a pocket for peanut butter.

We need that for men with like good business ideas, but bad business practices. Slow Feeder for men with ambition. That's a really good business model. We should start that. Now, he can afford to dole out that much money because right now he is making a killing. The business is doing really well. What would you do with all of that money if you were all of a sudden a multimillionaire? Cabezon outlets. Have you been to the Cabezon outlets? No.

I cannot say this loud or clear enough. The Cabezon outlets, go. It is an outlet store in Palm Springs that has every major designer, except for Aramaz, Chanel, and Louis Vuitton, all the rest are there. And the deals are crazy. I went for the first time last week, I'm Cabezon-pilled, all I do is think about Cabezon,

I'm texting sales associates, I'm like, if I had 30K from Charney, if I got the Charney bump, the Charney check, I'm going straight to Cabazon. Fendi, St. Laurent, Loueve, Bottega. That's where I'm headed. Wow. Well, Dove, he buys a house in the Hollywood Hills. I mean, you gotta.

I mean, that's actually... I was like, I would buy homes. That's actually what I would do. 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. Oh. One floor is for work.

Another is for pleasure. It's a CEO paradise. And an employee hell. And employee hell. One thing that he does, though, sidebar, the company also eventually launches a line of doggy wear. Take a look. How cute. Puppy style.

And then that dog is mounting the other one. How are they sexualizing dogs? They are. Oh my god. Leave the dogs out of it. Oh my god. That Shiba Inu's getting choked out. Also, I love like the heteronormativity there

of like the blue and the pink. Yeah, yeah. And the blues on top, just as God intended. The pink is just taking it. Now, with sudden success and his own party mansion, Charney becomes a minor celebrity. Okay, what do you remember about celebrity culture in the mid-aughts? It was perfect, no notes. No one got hurt.

Everyone got what they asked for. We got what we deserved. There we go. Yeah, I feel like it was like heiresses and like, you know, I guess people being famous for being famous. And clubbing. And scandal. That was the thing. Reality TV's at its peak, People being famous for being famous and clubbing. And scandal. Scandal.

That was the thing. Reality TV is at its peak and people are getting so rich off of controversy. Think about how Paris Hilton launched her career or Kim Kardashian. Everyone had a sex tape or at least some leaked naked photos. So why not good old boy Charney? American Apparel's marketing department actually launches a campaign featuring the CEO's member of the board. Let's take a look. Don't worry, he's wearing boxers.

Okay. Well, you know, is that him? For our listeners only, we're looking at Charney's lower half. It's wrapped in blue undies and there's a scantily clad model mid-mount. So... And his pubes are peeking out. Yeah, pu-peek. Yeah, he's working for himself.

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. Give it an album. You could maybe send it to your friends. I think we'd find it weird, but that's like not for public viewership. Yeah.

Yeah. Obviously he wanted to be famous. Yes. Literally. Yeah. Does this make you want to buy a t-shirt or leggings or even underwear? No, it doesn't. No. 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. 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. That's an interesting tactic. It's kind of genius. Because then you can debunk seven of them and go,

look, they're all fake. Yeah, yeah. Hiding in plain sight. Interesting. 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... Oh, no. -...multiple times. -...No!

Walks around the office in his underwear and freely admits to having sex with his employees. No! Now, so strange, because in today, immediate done. Absolutely. You would be catapulted to the sun. 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. And that's apparently fine back then. Imagine having like a multi, multi, multi, hundred, hundred million dollar successful, successful business and not just like enjoying that quietly. Like why? None of this was necessary. No, just be so rich. You know how many times you could go to the Capuzon outlet?

Stop! Literally every day. Oh. I know. While the company's marketing team intentionally perpetuates this story that Charney's a sexual predator, he is real happy with himself. 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. 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. But according to the folks who worked for him, Charney would get into consensual relationships with models just old enough to give consent. 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. It's like, sure, we can break up, but you'd get deported.

Yeah. Now, the more layers of Charney's life that are pulled away, the more disturbing details emerge. 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. Also, not cool today. 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. 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. After all, what do you expect from this admitted party animal? So, he's just kind of getting away with it at this point. Yeah.

But the years go by, and it's shaping up to be a death by a thousand cuts. There is a long list of complaints eventually levied against Charney, whose management style seems to be chaotic, erratic, and blatantly abusive. So buckle in folks, because I'm about to hit you with a long list of Charney's alleged misdeeds told over the years by ex-employees. They say, at least once, he rubs dirt into someone's face. They say he routinely screams at managers if their stores are dirty, making them cry. He threatens to slap his employees and at least once slaps his own face instead to show a worker he's insane, I guess. He also pretends to jerk off on his

graphic designer at some point because he doesn't like his work. Well, that one was just a joke. Yeah, we know he's willing to really do it. So the fact that he didn't do it, he saved, you know. 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. I'm wondering if he like, something happened to him? Yeah, what turned?

He started off so good. At what point are you just like, rubbing dirt in an employee's face and wondering why am I doing this? I know. Like does that not ever- How did we get here? Also, let's remember like you're selling T-shirts.

Yeah, all this for t-shirts. All this for t-shirts. 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. We're going to play a game on it. Bang!

Let's go. Quit or submit. We're going to do 30 spring reports tonight. We're going to lay them out here. I Bang, let's go. Winner submit. We're going to do 30 spring reports tonight. We're going to lay them out here. I ain't driving anywhere toward them. I'm standing right here.

No, no. Okay, this is the worst person on the planet. Yeah, I don't like that. Good on whoever filmed that. Yeah. 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. I don't know if you can 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.

I don't know if you can say anything to him. He looks so crazy. He's probably hiring young people, like people you can bully and intimidate. 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 was the like beginning of the end for these employees? Cause he was like running rampant for a while. For a long time.

Is it like when they moved into his house? Or like 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. Yeah, 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 gotta ask, how do you handle Charney? Like what should happen to him at this point?

I think 7,000 birds swarming above his head. One by one. Peck. Peck. Oh, my goodness. Is this like a medieval torture technique? This is what I think. Wow. I was gonna say jail, but I also like that. ["ALL LAUGHING"]

Well, we're somewhere in the middle because karma, karma is what comes in and does its magic. 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. And now it's time to test Charney's commitment to those fair wages and US-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 US. But that would

obviously go kind of against the whole made-locally thing. So any ideas ideas like if you were a corporate baddie, what would you do to fix this little problem? I would print more money. I will never understand why that doesn't work. And you can say inflation to me as much as you want. Print more money. Maybe send Americans to the overseas factories, then it's American made. Well instead of moving out of the country, Charney hires some consultants to improve their current factory setup. After identifying some inefficiencies in the downtown LA factory, Charney decides to build

a new one about 20 miles southeast in La Mirada. 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. Perfect compromise, right? 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. But no, it won't. It's a disaster. The logistics software doesn't work. Merchandise gets lost in the system.

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. But Charney, he's a man. He's not going to go down without a fight. So to save his company, Charney does a very cliched CEO thing and moves into his new factory. Contractors convert a men's restroom into Charney's private bathroom and build in a shower. He doesn't leave the factory. He stays there 24-7 and, according to his former staff, his already frail mental health takes a nosedive.

Well, of course. 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. 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. There were two suits filed against him in one month. Oh, God.

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, starting when she was 19. 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.

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? Basically. Basically. That's smart on Tarney's part, I guess. Read your contracts, everybody. So you think this would be the end of him, right? But no, of course not.

He's still important to the brand and American Apparel is still too powerful. 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. 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. 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. While American

Apparel, they just need to get their best and brightest to figure out an edgy product line or fresher marketing campaign to win back the consumers. 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. And the best and the brightest do not want to work there. 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. So the investors want a solution ASAP. running out of money, and they don't have enough cash on hand to pay off their $15 million in debt to continue production. 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. 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, Luttrell types out his plan and tries to print himself a copy, but he prints the plan without knowing which printer he sends it to. That's really funny. LAUGHS I just imagine him running around the building to every printer being like, oh my

gosh, where did this go? That's like one last glimmer of relatability. Literally. So someone finds it and rushes it to Charney. Oh, who's the snitch? Someone's a snitch. 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. The

board is made up of people who he hired. So why would they get rid of him? Because they love money. And at the end of the company's annual meeting, the board members ambush Charney and give him an ultimatum. They can publicly fire and embarrass the crap out of him, or he can resign and stay on as a consultant. So, Charney's between a rock and a hard place. Either way, he's going to lose control of the company he started as a teenager. What do you think he should do?

I think he should resign. Quietly. Quietly? Be a consultant. Yeah.? He'd be a consultant. Yeah. Pivot to music. Which is also what people will in that time we're doing. Yes, they were.

He needs his stars are blind. In the early hours of December 4th, 2024, CEO Brian Thompson stepped out onto the streets of midtown Manhattan. This assailant starts firing at him. And the suspect, He has been identified as Luigi Nicolás Mangione, became one of the most divisive figures in modern criminal history. I was meant to sow terror. He's awoking the people to a true issue.

Listen to Law and Crime's Luigi, exclusively on Wondery Plus. You can join Wondery Plus in the Wondery app, Spotify, or Apple podcasts. In the early hours of December 4th, 2024, CEO Brian Thompson stepped out onto the streets of Midtown Manhattan. This assailant starts firing at him. And the suspect. He has been identified as Luigi Nicholas Mangione, became one of the most divisive figures in modern criminal history. I was meant to sow terror. He's awoking the people to a true issue. Listen to Law and Crime's Luigi exclusively on Wondery Plus.

You can join Wondery Plus in the Wondery app, Spotify or Apple podcasts. Well, to make sure Charney understands his place, the board makes it explicit that they know where his skeletons are buried. Turns out they're on his work computer, where he keeps a staggering amount of pornography and incriminating content. Charney stalls, which doesn't work, and the board goes live with his immediate suspension. Luttrell becomes interim CEO. In the news, board members claim they're disturbed by new information about Charney's character.

When talking to the press, the co-chairman, Alan Mayer, says, quote, 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. Now, they don't say what these facts are, but they've started an investigation into Charney's misconduct. It seemed pretty out in the open to me, but who knows. Mm-hmm. Yeah, it doesn't seem like new information. So game over for good old Dove, right? Except he's waskily. Put on your exiled CEO caps for a sec

and see if you can guess what his next move is. He sends the dogs. He releases the hounds onto the factory. The dogs from the billboard? Yes. They're all horned up and ready to attack. He does do a hostile takeover. Whoa.

He's living in a TV show. I literally. Truly. 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. 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.

Oh wow. That's it. Can anyone do that? Can you just buy enough of a stock and then be like, I'm in charge now? Basically. Can someone do that for like Tesla? Yeah, I wonder. It'd be a lot of money. Gotta find someone real rich or a bunch of rich people. Yeah, but their stock is getting quite low. Yeah, we can pitch it.

Yeah. We'll pitch it. Yeah. We'll go Dutch on Tesla. Comedians Jared Goldstein and Sasheer Zameida. 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. The agreement Charney just signed stipulates that if American Apparel fails as a company, Charney will owe Standard General $20 million, plus in the meantime, he'll owe them interest on the loan, which is about $9,000 a day.

Oh boy. There's a lot of pressure on it. Yep. So without skipping ahead to the company's collapse, what do you think the first thing that goes wrong in Charney's attempt to regain control of the company? First he wakes up, diarrhea. He's like, oh, not today. Yeah, he just doesn't get control.

His little plan, it just doesn't work. According to Charney, the head of the hedge fund think Charney's reputation is a problem and says he can pick the next CEO and then she will be his puppet. 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? Well, Schneider immediately sides with the hedge fund and the old board and refuses to follow Charney's demands. That's really funny. I know. So funny. The new leadership then launches a pro-women campaign.

Yeah, that's a good rebrand. Yeah, good rebrand. They also do something unexpected. They blur nipples and erase body hair on American Apparel's website. But instead of playing into the pro-woman of it all, this move causes a commotion from the sex-positive contingent. Now Schneider and the board are in trouble with the customer base, and American Apparel continues to spiral.

They were so close. They almost had it. Just keep blurring the nipples. Don't stop. 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. Is that where that started? Free the Nipple?

No, no, no. He was just, that was a thing. So he was using that and being like, look at that. That's good. American Apparel bad. We should also, yeah. Wouldn't be surprised if he was behind Free the Nipple. Right?

Little mastermind that he is. In that same sort of legalized LA way. Mm-hmm. Rumors also start circulating that this new American apparel will move production to a cheaper country, which lights a fire under their workers, allowing Charney to lead them in a protest. And at one such protest, a piñata shaped like Paula Schneider gets destroyed.

Oh my God. That's petty. Very petty and personal. So they're mad. 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. So, soon after, unable to pay its debts or get new loans, American Apparel files for bankruptcy. Thousands of workers lose their jobs, the company gets delisted from the New York Stock Exchange, and Charney owes Standard General $20 million.

Wow. So huge American companies like Amazon tried to buy it up. Ironically, a Canadian company called Gildan Activewear buys it at auction for $88 million. And American Apparel becomes an online store with no affiliation to Charney. We should be able to do this with the Instagram accounts of disgraced people. Just buy their Instagram account? Yeah, you know, they got a big following.

Someone should be able to pay for that. Utilize it, that's true. That is true. What's happening with Diddy's account right now? That's millions of watchers, consumers. 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. Having lost his life's work and his social life all at the same time, he immediately launched a comeback. In 2017, he started LA Apparel, basically the same deal as the original American Apparel, except now everyone knows to be wary of him. Since all of his wealth evaporated with American Apparel's bankruptcy, he ended up refinancing his mortgage and Airbnb-ing rooms in his Silver Lake mansion to cover expenses. In a 2023 article, Rolling Stone reported that several disgraced dudes live in the mansion,

including Milo Yiannopoulos, Ian Conner, and Kanye West. They're just roommates, guys. That's really funny. Who was washing the dishes? Nobody. Yeah, I mean, just screaming the whole time. They're like, cleaning is such beta behavior. Yeah, if I didn't think they needed to just be like, you know, locked away somewhere, I would want cameras there.

I would, I kind of want to see this reality show. Big disgraced brother. Yes. So good. 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. But despite certain precautions, the factory was later found to violate health guidelines.

For example, they were using cardboard barriers instead of social distancing. Around 300 people got sick that summer before a mandated temporary closure. At least four people died. Oh no. 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. He was hired to be its CEO in 2023, and together they planned to release Yeezy's White Lives Matter t-shirts.

Yikes. Charney did eventually back out. But again, yikes. That's so funny that Charney was like, you know what, this is too far for me. Like, you know what, I know I've been crazy for decades, but like this actually is like, this is where I draw the line. But I can't help but thinking it probably wasn't what they said. It was probably the quality of the t-shirts.

Yeah, he's like, I don't, he can say whatever. Yeah, white lives matter. Fine. I just, I don't like how they're sewn. The threading looks really bad. It looks really bad. They're not, they're not buttery soft. Yeah.

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 Dove Charney and American Apparel? LA Apparel. Who doesnney and American Apparel? LA Apparel. Who doesn't love LA Apparel? There we go. I guess that it's nice to know that no matter what Venture Charney is doing, it will end.

The karma keeps following him. The reputation precedes him consistently. You always hear going bankrupt, it's like a tax move and nothing really happens. So I just wonder, is he rich? Where is he? Yeah, does he still owe $20 million? To owe someone $20 million?

As a person, not a business. You're just gonna take that up with Jesus Christ. 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 gonna get lunch today. I don't know what to tell you. Like I'm going to Panera, babe. I don't have it. 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? The middle one. I think a mega flop because it just flopped so many times in so many ways.

There are multiple flops happening. All avoidable. Well, thank you so much to our fashionable guests, Sashir Zameda and Jared Goldstein for joining us here on The Big Flop. And of course, thanks to all of you for listening and watching. 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. 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. Bye. Bye. Bye. Bye. Bye. Bye. If you like the big flop,

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