American Apparel Fires CEO Dov Charney

After a harrowing year that's been, Los Angeles retailer American Apparel officially announced on Tuesday that it had fired founder Dov Charney and appointed a new CEO. Following an investigation the company's board of directors terminated Charney “for cause" in accordance with the terms of his employment agreement.

Longtime fashion executive Paula Schneider, formerly of Warnaco has been named as the retailer's next CEO. "We're pleased that what we set out to do last spring namely, to ensure that American Apparel had the right leadership has been accomplished," American Apparel co-chairman Allan Mayer said in a statement.

The company has lost $310 million in nearly five years and carries more than $200 million in debt. In its latest quarter, American Apparel posted a net loss of $19.2 million, or 11 cents a share. After the unsavory headlines attracted by Charney the company hopes that Schneider can bring stability and maturity to the edgy retailer famous for advertising that pushes the limits of acceptable sexuality.

“This company needs a permanent CEO who can bring stability and strong leadership in this time of transition, and we believe Ms. Schneider fits the bill perfectly,” said David Danziger, co-chairman of the board.

Schneider is a fashion-industry veteran and has helmed brands like BCBG Max Azria, Warnaco, Gores Group, and Laundry by Shelli Segal. In a statement, she said: “American Apparel has a unique and incredible story, and it’s exciting to become part of such an iconic brand. My goal is to make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweatshop-free, Made in USA manufacturing philosophy.”

She officially starts as CEO on January 5. Scott Brubaker, who has been serving as interim CEO, will stay on as a consultant from that point on.

Following Charney's ouster and the appointment of Paula Schneider as the new chief executive shares of AA shot up nearly 19% to 69 cents Wednesday.