Dov Charney loses American Apparel

American Apparel is about to exit bankruptcy as the company prepares for its next chapter, but it will do so without its founder Dov Charney.

American Apparel will be taken private and control given to its largest bond holders, according to the Los Angeles Times. A U.S. Bankruptcy Court judge has approved the company's reorganization plan to repay creditors. It's the plan put forth by CEO Paula Schneider, who also plans to cut costs.

Earlier this month, Charney offered $200 million to take over the company he founded in 1998. His plan offered alternative restructuring provided by investors.

American Apparel's future is still unclear, although analysts are more optimistic now that the company's turbulent times are behind it. "It has the potential to be a phoenix rising from the ashes," Craig Johnson, president of research firm Customer Growth Partners, told the LA Times. "It has certainly fallen on some hard times, and now they are trying to shrink the company and hopefully come out smaller but healthier going forward."

Charney may be down but he's not totally out, thanks to new financial backers. "We are backing Dov on a new venture," Chad Hagan of Hagan Capital Group told Bloomberg Business. "We will keep an eye out on American Apparel and see what happens with the brand. Ideally, if we can pick it up down the road, we will."

The new venture could be a direct competitor to American Apparel, but further details were not available. "Stay tuned," said Charney in a statement.

For more:
-See this Bloomberg Business article
-See this LA Times story

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