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American Apparel fires controversial founder over misconduct allegations

American Apparel has fired its founder Dov Charney and is looking to oust him as president and CEO amid ongoing claims of sexual harassment.

The company’s board voted yesterday to strip Charney of his position, effective immediately following a 30-day cure period. As new co-chairman, Allan Mayer announced that American Apparel is ‘larger than one individual’. He said that the board’s decision to replace Charney grew out of an ongoing investigation into alleged misconduct.

"We take no joy in this, but the Board felt it was the right thing to do," Mayer said in a statement. "Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead."

Charney started the fashion retail business in 1998, which often uses sexualised adverts to sell American Apparel’s line of products. He reportedly walked around the office in his underwear and was sued in 2011 for allegedly posting nude pictures of three women on the internet.

The board has appointed John Luttrell as interim chief executive officer, who currently serves as executive vice president and chief financial officer, and will continue in those positions.

Allan Mayer and David Danziger have been appointed co-chairmen to replace Charney as chairman of the board, both have been board members since 2007 and 2011 respectively.

"We have one of the best known and most relevant brands in the world, with employees who are second to none; I believe we have a very exciting future," said Luttrell.

"Our core business—designing, manufacturing, and selling American-made branded apparel—is strong and continues to demonstrate great potential for growth, both in the U.S. and abroad. This new chapter in the American Apparel story will be the most exciting one yet."

Luttrell said American Apparel would remain committed to its sweatshop-free, Made in USA manufacturing philosophy.

The company said the move could leave it in default under its credit agreement, prompting discussion with its lenders.