Oct 21, 2015

How Dov Charney Made & Ruined The Cult Of American Apparel

October 20 2015

Stephanie Padilha's is the quintessential American Apparel story: a young woman specially picked by AA’s former CEO Dov Charney for greatness — and hipness.

"I grew up as a girl in Brazil hearing from my mom about the quality of the cotton T-shirts and the denim from America,” says the 28-year-old Padilha. After graduating with a degree in fashion and fine arts, she worked at magazines and with Brazilian designers, and was cast in a few commercials and B movies. She had a fashion blog, where she would pose in dreamy, '20s-era outfits with starry crowns and vintage makeup — until she discovered American Apparel. "I remember seeing one of the ads with the high-waisted denim. I was so stoked that they had one location in São Paulo,” she says. In 2008, she applied for a job at the store and was hired in the stockroom, quickly moving up to sales and visual merchandising.

That’s when Charney made a personal visit to the store where she worked. “[During that week], he saw my dedication,” says Padilha, who transferred to American Apparel’s Los Angeles headquarters a year later to be a regional merchandiser. "I was in love with this company,” she says — especially its dedication to manufacturing fashion in America at a time when all the other major players had shifted their operations overseas. "There is no other place where I would feel more happy and proud to work than American Apparel. All my passion came because it was sweatshop-free,” she says.

American Apparel, one of the most recognizable, zeitgeisty companies of the mid 2000s, whose deep V-necks and hipster brand of neon jersey all but defined the decade, seems to be flaming out. Once valued at about $1 billion, the brand filed for Chapter 11 bankruptcy protection in October, after firing Charney last year and lurching from quarter to quarter with plummeting sales and growing competition from fast-fashion houses like H&M and Zara. It was a sad day for consumers who want to know who makes their clothes: If American Apparel can’t reorganize and pull out of its current rut, almost 3,000 factory workers in L.A. could lose the best paying job they’ve ever had, along with the rest of the brand's 8,500 employees worldwide. 

But to pretty much everyone — Wall Street analysts, the media, many former employees, and American Apparel’s own management — this turn of events seemed inevitable, given Charney’s erratic management and infamously inappropriate behavior. Here’s a brief recap: The former CEO masturbated in front of a Jane reporter, was the target of at least eight sexual-harassment lawsuits, and was sued by a former accountant who says he got fired for refusing to cook the books. Before Charney's dismissal for alleged misuse of corporate funds and a series of sexual-harassment complaints (including allowing an employee to publish a blog with nude photos of another former colleague, otherwise known as revenge porn), his company had turned a quarterly profit only once in the previous five years, racking up losses totaling $300 million. 

Ethical Clothing Made By An Unethical Man

A CEO who has run into so many PR disasters and has a dismal financial track record? Of course he should be fired. But then, American Apparel is unlike any other fashion brand out there, as I found out after speaking with current and former employees, Dov Charney’s supporters, and Charney himself. Because, despite the endless lawsuits, the sexts he allegedly sent employees, the viral video of the ex- CEO flaunting his penis in front of staff, the cult of Dov Charney lives on at AA. 

To date, nearly 900 die-hard supporters have signed an online petition, and a Save American Apparel advocacy group churns out pro-Charney content. Do any reading on American Apparel lately (including on this site), and you’ll run across a barrage of comments espousing conspiracy theories about Charney’s ouster and the supposed incompetence of the new CEO, Paula Schneider.

Every week, protesters gather outside the company’s L.A. factory to rant about the new management, and especially Schneider. In August, workers beat up a piñata made in her image as part of a raucous protest several eyewitnesses called a riot. “People were scared — including the head of security,” a current employee who didn’t want to be seen taking sides told me. "It was absolute, utter insanity. There were groups of women [hiding] in rooms, and people were beating down the door."
Schneider has made some admittedly difficult decisions since taking over, like slashing expenses, drastically cutting overtime, and laying off 135 of the company’s factory workers. Still, “no one would expect it to be this contentious,” she tells me. “Nobody expects riots.”

Nobody, that is, except “Dov’s girls” — Charney’s band of hardened loyalists. The fact that employees would go to such lengths to reinstate an abusive leader makes no sense, until you realize one thing: Charney wasn’t just running a cult brand — he ran his company, in several meaningful ways, like an actual cult.

Drinking the Kool-Aid

The word “cult” gets tossed around a lot these days, being attached to relatively benign fads, like, say, juicing. It’s easy to forget that cults have a long, dark history. They suck normal people in by using the guise of religion or self-improvement, then financially or even sexually abusing those followers, breaking them down psychologically to allow that exploitation to continue. 

When I call up one former employee and tell her I am investigating whether American Apparel was run like a cult, she laughs and says, “Oh, yeah, I’m buying what you’re selling on that one. I quit [my job] three separate times. Every time, I would feel really relieved. And somebody would call me up and say, 'Why did you quit? What job do you want? What would you like to do?' And I would go back, and it would be all of the same problems. I was like, This is really fucked up. This company is like my really bad boyfriend I can’t get away from."

But was it really a cult? Steven Hassan, a former leader of Rev. Sun Myung Moon’s Church of Unification who now helps ex-cult members rebuild their lives, tells me he can’t give me an assessment of American Apparel since he hasn’t studied it. But he offers some general advice, including one key question to ask a potential cult member: Is there anything that the leader could say or do that would make you never trust him or her again? “If people don’t have a bottom line, they’re in trouble,” says Hassan. He notes that “a cult can be not just a religious organization, but a business, a family system, a relationship," and that "no group is completely clean.”
Charney certainly had some of the telltale characteristics of a cult leader. According to former FBI agent Joe Navarro, who has written about cult behavior, the leaders typically denounce others as inferior and subject them to ridicule and humiliation. Charney liked to be the center of attention, for sure, dressing in inappropriate clothing and making theatrical entrances. “He would burst into the department you were working in and go on a rant for three hours, literally,” a former employee told me. “He had a temper. He once threaten[ed] physical violence to me,” she said.

Charney was also said to walk around the office in his underwear, part of the hypersexualized atmosphere he allegedly subjected his coworkers to, whether they liked it or not. Every Wednesday morning, he had a worldwide global conference call where every store dialed in and listened to him dictate how employees should dress and groom — another cult hallmark. (AA’s brand image guidelines discouraged eyebrow plucking, wearing concealer, having more than one earring per ear, and even blowdrying your hair.) And Charney didn’t tolerate criticism. When an ABC reporter asked him about the sexual-harassment lawsuits, he began yelling that it was an unfair line of questioning and almost stormed out. “A lot of people are like wounded children because they put up with this tyrant so long,” an employee told me.
A cult leader is on a special mission to save humanity — or in this case, American manufacturing. Charney arguably treated his factory workers better than his corporate employees, offering them free massages and decent wages with lots of overtime. For many of his employees, American Apparel wasn’t just a job. “I felt like I was a part of something important,” one of them tells me. “It was different from what other fashion companies were doing. Forever21 was down the road and we judged them.” She adds: “If I could go back to the good old days, I would.”

At American Apparel, people seemed to tolerate racism and sexism, for the pursuit of a bigger goal. “People are so focused on Dov and his blow jobs — who cares?” a Charney supporter tells me bluntly. “He’s put food on the table for himself and [his workers'] families, and they’re making a good living.”

Workdays at American Apparel were long and often followed by after-hours socializing. Joey Ng, a Charney loyalist who was fired by the Schneider regime, says in her bizarrely un-self-aware public petition to reinstate Charney, "There is no work/life balance [at American Apparel]. That’s not what I’m trying to achieve…. We blur the lines. We are a family. We stick up for our own." Another former staffer told me, “[Employees] had company apartments, so people would be staying with you — a guy in his 30s would be staying in the company apartment with me when I was 22. [Management] would ask, ‘Who has the drugs?’ They would take us out all night and everybody would get wasted together. We were all sleeping with each other. If you came into the company, [the assumption was that] you would already be okay with these things."

The way AA insiders tell it, Charney stocked the executive suite with pretty, young, often unqualified hires loyal only to him, known as “Dov’s Girls.” “Whoever the flavor of the month was, whoever he was seeing, or some model, would be head creative in charge of photo shoots,” a former employee told me. “He would see a fashion blog and bring in 20-year-olds,” another former AA staffer adds. “These women he slept with were mean,” another employee told me. “Once he empowered these individuals, they were tyrants.”

In a moment of typical candor, Charney told a New York Times reporter in 2006, "Sex is a way to bring people closer.” Or — perhaps, to manipulate them. “[In] a lot of the destructive cults, the leaders are doing it and the members don’t know it,” Hassan told me of sexual exploitation. “If they do know it, it’s justified as consensual. The woman feels empowered, but it’s actually a manipulation, an abuse of the differential of power.”

As one female former store manager says, “If you stayed on good terms, not necessarily even doing good work, but making yourself popular, you could get anything you wanted. I was invited to do weird sexual things with male supervisor-types that were 15 years older than me. Like, ‘You should really come out to L.A.; we could find something for you there.’ Really? Because it’s 4:30 in the morning, and I’m wasted and you’re trying to come out to my house.”

At this point, all of the sexual-misconduct lawsuits against Charney have been dismissed or settled out of court, in part because employees had to sign agreements that they wouldn’t sue the company in order to get bonuses or raises. So how many women were sexually harassed or assaulted who never came forward? One employee tells me about an instance when a supervisor asked her how many people she had “fucked” to get a promotion (none, for the record). “There were several people around, and everyone thought that was totally appropriate to ask,” she says. “It was understood that if you had moved up, you had slept with some person in the company who got you there. There was an impression that if you weren’t okay with it, you should leave.”

Reporters, Beware

There’s another way that Charney’s AA looks a lot like a cult. You may have heard what happens to reporters when they write about modern-day cults: They can expect full-body pushback. Similarly, when Team Dov found out from Charney’s lawyer that I was writing this story, they snowed me under with “resources” and people willing to speak to me (off the record) to convince me of Charney’s genius. During one heated conversation, a Charney supporter burst into tears — and then called back with a high-level anti-AA supporter on the line, to intimidate and admonish me.

One person who is willing to talk — and talk — on the record is Stephanie Padilha, who was fired by AA last August and is now the president of an informal union for the company’s factory workers (called General Brotherhood of Workers of American Apparel, which she helped organize). She has a list of grievances against Schneider and the board, both large and small, that is impressively long, but not, I discover, particularly factual. For instance, Padilha says armed guards “roam the factory, intimidating employees,” but a reporter with Refinery29 did not see any guns, and employees on the scene told her the guards actually aren't armed. Padilha objects to the new fence around the factory, and to the fact that employees have to show their IDs at the door. But when I bring up the piñata incident and that Schneider says she has received threatening emails, she brushes this off. “The rich rob the poor; it’s business. When the poor fight back, it’s considered violence,” she says.

Padilha says Schneider has done zero positive things for the workers, despite the new regime having offered paid sick leave and holidays, basic benefits that Charney, for all his talk about his workers, never actually provided. As for the union, there is no record of an election or petition being filed with the National Labor Relations Board, which are prerequisites for officially starting a union. (Padilha says management is illegally ignoring the union.) She claims Charney supporters make up 90% of the workforce, but sources inside the company that are not affiliated with either side say that they make up a small fraction, a hundred workers at the most, and that most employees just want to come to work without getting spit on and harassed by pro-Charney protesters.

Who’s telling the truth? In search of facts about the current state of affairs at the American Apparel factory, we approached two factory workers outside. Both said most workers want Charney back. But one added that she didn’t want a union. “I think how it is now is fine,” she said in Spanish. “There isn't a problem.”

Padilha got me in touch with Sara*, a factory worker who has been at American Apparel for six years. “Now that people like Paula have arrived, she has destroyed all of our goals and opportunities,” Sara says. Sara has never heard any rumors about sexual harassment by Charney, or about any financial troubles, either, until this year. She only saw the side of Charney who would often visit the factory floor and speak with workers, assuring them that they were all in this together, even as the company lost money year after year. He would celebrate holidays with them. He treated them as equals. “All I know is that he’s been a great boss,” she told me in Spanish through a translator, “[He was] a benevolent man who cared for everyone involved.” 

Sara is also unhappy with Schneider: “I believe that she’s also lying to us, when she says our jobs are not going abroad.” When I ask her if there is anything Charney could do to lose her trust, she says, "No, he’s a great entrepreneur. We trust him 100%. He will have something for us."

I heard breathless worship from Charney's supporters, who begged me in emails to listen to their side, even though they legally can’t go on the record — American Apparel successfully sued Charney earlier this year for trespassing and threatening employees who don’t support him. His restraining order says he cannot make any disparaging remarks on the company, and it's also true for some within his inner circle. “I'm in the middle of litigation with Standard General and American Apparel. I have been caught up in a corporate war and I have been targeted,” one supporter said. When word got out that I might not be writing an exonerating story about how Charney was cheated out of his company, emails flooded into my inbox accusing me of being a bad reporter, and claiming that pretty much every media outlet had gotten the story wrong, including The New York Times. I diligently followed up on claims against Schneider and the board, one by one. Eventually, though, I had to let it go. No sooner would I cross one baseless accusation off the list than another supporter would bring up another unverifiable one. This fixation on tiny details distracts from the larger picture, which is this: Any other CEO would have been fired a decade ago for any one of the bad decisions and unprofessional actions Charney made.
At the end of our call, Stephanie asked me, “You will focus the story on the workers, right?” As she waxed poetic about their plight, she almost had me. After all, you cannot deny that Dov worked hard to build a company that was proving — for a time — that you could be profitable and hip while paying American workers a living wage and treating them with dignity and respect that immigrants workers rarely receive.

American Apparel was a style leader. Arguably, it defined the mid-2000s look and is one of the most important aesthetic touchstones that millennials have with retailers, its plain tees or scoop-back jersey dresses became instantly recognizable. Many people, myself included, want American Apparel, the preeminent retailer of ethically produced basics, to stick around and thrive — albeit without the sleaze. I want to be able to buy knee-high socks without wondering who was exploited in the process.

But by installing incompetent workers in senior management, mismanaging the financials, sexually harassing women, creating a cowering workforce that could not function without his daily input, refusing to step aside and let seasoned business professionals run the corporation, and then engaging his loyalists in a destructive fight — all behaviors of which Charney is accused — the ex-CEO himself sowed the seeds of American Apparel’s implosion.

Why would Team Dov believe so fervently in him while his misdeeds are so many — and so widely known? Here’s a theory: because they’ve invested too much into the fantasy, and facing the truth would be too painful. “Everybody tells me to go get a job somewhere else,” Padilha says. “But I believe this is going to be big for the community. I did sacrifice. I gave up on my blog and my personal stuff. My family in Brazil…they keep asking me, is everything okay? I don’t want to worry them,” she says. “Dov is a genius. He had a vision for the company. It was magical. Dov is always so transparent, clear like water. He cares about people and it’s real. Nothing will change my mind.”


No comments: