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Dov Charney and His Underpants: Trading Leadership for Libido

July 5, 2010

Several years ago, I read an interesting business article about an upstart clothing manufacturer and its creative owner. Its name American Apparel was catchy, and what was interesting was that the owner was from my home town of Montreal, Canada. I was intrigued that a Montreal entrepreneur had set up shop in Los Angeles to produce hip clothing for young people.

Dov Charneygot into the clothing business as a college student, travelling to the US to buy T shirts and other apparel and then selling it back in Montreal. Why? Because the merchandise was both cheaper and better quality than in Canada. I can attest to this because my wife and I used to take trips to New England in the nineties with our four kids to load up on clothes for school. These were the good old days when Made in the USA was common on clothing, towels and linens. Try finding that today.

What has distinguished American Apparel from the clothing industry over the past 15 years has been its commitment to manufacture clothes in America, preferring not to offshore production. Moreover, the company pays its workers up to double the industry wage AND provides healthcare benefits. I was impressed, especially as I have researched the offshoring of work from Canada and the US to far-flung countries.

Then the creepiness started with Dov Charney. I began to read accounts in business magazines about his oversized libido and his bizarre antics with his young female staffers. Or perhaps entourage is a better word.

The lawsuits started and American Apparel’s reputation started to suffer. It didn’t seem to deter Charney, who has admitted to some of his indiscretions, including his parading about the workplace in his underwear.

I don’t have to tell you that the clothing industry is highly competitive, in particular when it comes to producing styles that appeal to youth whose tastes are fickle and which change frequently. American Apparel aims at a specific niche of the market, and as a consequence staying focused yet constantly looking ahead to new styles are two opposing tensions.

However, when the boss inserts his own work style and sexual preferences into the workplace all hell will eventually break loose. And that’s what’s happening at American Apparel. Industry observers have begun a death watch of the company, with the latest news being its deteriorating financial performance.

This is a shame. American Apparel’s imminent demise shouldn’t be happening, but it is because of what I’ve briefly described above. When a company’s purpose (read mission) is derailed and its vision is diluted because of its CEO’s behavior (in this case also its founder), and in the context of a highly competitive, cost-driven and volatile industry, it’s virtually impossible for a firm to remain viable in the long-term, let alone medium-term.

My question to you is this:

If you’re a guy, would you consider strutting around the workplace in your BVDs, soliciting young female staffers?

Or if you’re a gal, would you contemplate parading around in your best undies, inviting propositions from young male employees?

If you answer yes, then I suggest sending your resume to Dov Charney.

However, if this idea is not your preferred approach to leading people how would you go about creating an ethically-driven, people-engaged, mission-focused organization that is operating in a highly competitive environment?

Share your ideas below.

No man was ever wise by chance. (Seneca)

Be sure to download my new e-book:
Becoming a Holistic Leader: Strategies for Successful Leadership Using a Principle-Based Approach

2 Comments leave one →
  1. July 6, 2010 10:13 pm

    What an interesting post! I had never heard about Dov Charney and his bizarre antics. I guess the fact he pays his U.S. workers well and offers benefits is compelling enough for most of his staff to look the other way.

    It’s a shame that another seemingly “good guy” is really just a creep with enough money to have fooled folks for a long time.

    • July 7, 2010 2:51 am

      Susan, this is one of the weirdest business stories I’ve followed over the past several years. A visionary entrepreneur who produced jobs in Los Angeles in a highly competitive market yet who appears to be on the cusp of imminent obscurity is a sad story.

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