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CEO Schneider exits American Apparel as company unravels

CEO Schneider exits American Apparel as company unravels

Paula Schneider is the latest to jump ship from troubled garment maker American Apparel. The CEO is voluntarily resigning her position as of October 3, according to a story on Women’s Wear Daily. She will be replaced by Chelsea Grayson, formerly American Apparel’s general counsel and chief administrative officer, who saw the company move through bankruptcy and into privatization.

Schneider was with American Apparel for over two years, taking the CEO helm after founder Dov Charney was ousted by the board in December 2014 for alleged misconduct. Charney’s vision helped lead the American-made hipster clothing company to success, fueled by simple-yet-approachable designs and racy, often controversial ads that featured scantily-clad young models in provocative poses.

Schneider is leaving as the company remains in flux. After Charney’s departure, many changes ensued, including layoffs and bankruptcy. Last year, Charney tried to get back in, trying to buy the company back with Hagan Capital, but that plan didn’t work out, and the company has moved forward into privatization, though it is still for sale. Schneider hinted, in a letter of resignation obtained by Women’s Wear Daily, that the potential sale of the company might have had something to do with her decision.

“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,” said the letter.

American Apparel board member Paul Charron, former chief executive at Liz Claiborne Inc., left the board in August and is being replaced by Brad Scher or consulting firm Ocean Ridge Capital Advisors.

With the company’s bankruptcy behind it, the new board and CEO hope to look forward, but the company has declined to comment on the changes and how it will be doing business moving forward.