American Apparel CEO exits

Image: Mike Mozart / CC BY 2.0

There's another shakeup at American Apparel – CEO Paula Schneider will step down after leading the company through a reorganization under Chapter 11.

Schneider will leave Oct. 3, according to reports, and will be succeeded by Chelsea Grayson. Her departure follows that of chairman Paul Charon, who previously served as CEO at Liz Claiborne. 

The executive shuffle comes as American Apparel explores a sale of some or all of its business. As part of the reorganization, the company is shifting manufacturing from Los Angeles to more cost-effective facilities, with production staying in the United States.

RELATED: American Apparel could be for sale

The reason behind Schneider's departure is unknown, but in a resignation letter obtained by Women's Wear Daily, she said, “the [turnaround] plan has been laid out and much of the heavy lifting and the hard work has been done.”

She also seemed to hint at a difference of opinion regarding the sale options and subsequent strategy.

"The sale process currently underway for all or part of the company may not enable us to pursue the course of action necessary for the plan to succeed nor allow the brand to stay true to its ideals. Therefore, after much deliberation, and with a heavy heart, I’ve come to the conclusion it is time for me to resign as CEO," she wrote.

RELATED: Dov Charney is back in business

It's just the most recent chapter in American Apparel's storied history, one marked by a controversial founder (Dov Charney) and descent into bankruptcy. Charney himself has tried to take back the company but has since founded a new one, based on American Apparel's original business plan complete with Los Angeles-based manufacturing facilities. 

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