American Apparel Tuesday announced a new chief executive and said controversial founder Dov Charney would no longer be employed by the company following an investigation of his conduct.
The company appointed veteran fashion executive Paula Schneider as chief executive, to begin January 5. Schneider has served in senior roles at a number of retail and apparel companies, including BCBG Max Azria and Warnaco.
Famous for making its garments in the United States and also its racy advertising, American Apparel said it concluded following a probe "that it would not be appropriate for Mr. Charney to be reinstated as CEO or an officer or employee of the Company."
Charney had been suspended in June following allegations of sexual harassment and bizarre behavior, such as walking around company sites in his underwear.
He continued to serve as a consultant to the company, but the board said Tuesday that "this relationship has now been terminated."
After Charney founded the American Apparel in 1989, the company grew aggressively, billing itself as a "sweatshop-free" manufacturer that made all its clothes inside the United States.
However, the company has struggled in recent years, reporting a loss of $106.3 million in 2013.
Scott Brubaker, who has served as interim chief executive, will remain a consultant after Schneider joins the company.