The Story 

In this episode, we trace American Apparel’s rise from the early wholesale days in South Carolina to the booming retail behemoth it eventually became. Along the way, we speak with some of the people closest to former CEO Dov Charney, in order to figure out how his past informs the present.

We also begin to explore how sexuality came to define the American Apparel brand, and how Dov’s unorthodox business practices and questionable personal behavior led to widespread scrutiny about what was really going on at the company.

 

The Facts

Andrew Dunn and Martin Peralta mixed the episode.

Our theme song was written and performed by Mark Phillips.

Our updated theme was remixed by Bobby Lord.

The special ad music, Microliters, was written and performed by Build Buildings.

Our logo was designed by Elias Stein.

Additional music from Tyler Strickland, Tom Bromley, and the band hotmoms.gov.

 

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Show transcript

DOV: Look how cool that is, that metro thing. C’mon that is cool. Isn’t it?

LISA: Oh yeah! There’s a metro stop right on a highway?

DOV: Yeah, this is LA, dude. Get with the program.

LISA: Hello. From Gimlet Media, this is StartUp. I’m Lisa Chow. And once again, I’m sitting in the car with the ex-CEO of American Apparel Dov Charney.

And just a quick warning, there’s some swearing in this episode … and some sexual content.

DOV: This is an interesting mural that I’m going to shoot now since we’re in traffic. That’s a good one.

LISA: Dov’s taking photographs while driving. This happens all the time. Something catches his eye — a mural or an old sign or a storefront — and he has to get the shot. So he rolls down the window, grabs his phone, and stretches out both hands…and totally forgets about the steering wheel.

(Truck honks)

DOV: Oops. Oops! that was a good one though. Fashion Square. They’re going to like that one in Paris. Shit, there’s a big Mack truck on our ass.

(Truck passing)

LISA: The photos he’s taking are of what you might call vintage LA. There’s a sign for a hair salon, painted by hand. The words written in Spanish. There’s a mural of a bright blue car with tailfins. A fading red and yellow sign reads “Sexy Donuts. Ice Cream. Croissant.”  

These photos are part of Dov’s marketing plan for his new company. He shares them on Facebook and Instagram.

DOV: So yeah, I’m showing people these neighborhoods, these vernacular signs,

capturing the, you know, the textures of these communities. I’ll probably end up building a massive operation down here. Bring it all together. Probably end up employing thousands of people. You know, probably break my back doing it, but I’m going to get it done.

LISA: For a lot of people, this would be a very bold claim. Looking out on a stretch off the highway and declaring that one day you’re going to build a factory there and employ thousands of people.


But for Dov, that claim is not so outrageous. Because he did it once before. He did it at American Apparel — the company that fired him in 2014, and filed for bankruptcy a year later.  Just this week, American Apparel declared bankruptcy for a second time.

Today on the show, we’re going back … to the first time Dov did it. The first time he started making t-shirts in a little factory off the highway, and eventually grew that into a business that employed 10 thousand people around the world. We’ll look at how Dov saw the world and how the world began to see Dov.

The story starts many years ago, when Dov was a kid.

SYLVIA: As a parent I was really, very frightened often.

LISA: This is Sylvia Safdie, Dov’s mom.

SYLVIA: You know, because one thing was — and you could see this in Dov always — he’s very hard to create boundaries. He just did not like not to be confined.

LISA: I met Sylvia at her home. She’s an artist, and lives in a spacious loft in Montreal.

LISA: Wow. Yeah. This is beautiful.

SYLVIA: Thank you. We work there. My studio’s on the first floor.

LISA: We sit down at Sylvia’s dining room table. She’s dressed casually, in loose fitting olive green pants. She tells us they’re American Apparel. And she wears the same glasses as Dov, thick 70s frames.

Dov and his mom are close — they talk almost every day.  His parents divorced when he was 3. His dad lived close by, and Dov would roam between the two houses.

A lot of entrepreneurs have stories of their childhood businesses. But Dov’s childhood businesses, they feel like they’re on a totally different scale. When Dov was just 11 years old, he started printing and selling his own newspapers. But even at 11, Dov showed a drive that felt almost scary to his parents … like they didn’t know where it might take him.

SYLVIA: One night I was at a wedding and my — his babysitter calls and she says, “We don’t know where Dov is. I called all his friends. He’s nowhere.” I came running home. I was going crazy. I called the police. I was going crazy. And he suddenly arrives around 2:30 at night in a taxi full of papers. And I said, “Where have you been?” And he said, “I’ve been at the printer.” I said, “Why didn’t you call?” He said, “I was too busy.” I said, “Why are you doing it at night?” He said, “It’s cheaper, mom. It’s cheaper. I don’t have that much money, I have to do it at night.” So everything was a test, you know? And do you punish him? Of course you try, but then he would, you know, really, he would take, he would take me to court, like, his rights, why he should, why he shouldn’t, badada, you know. It was a constant challenge.

LISA: By the time Dov was a teenager, his entrepreneurial activities were focused mostly on t-shirts. In high school, he would buy t-shirts across the border in the States, and upsell them back in Canada. At 16, he was peddling bootleg t-shirts at a Madonna concert. By the time Dov got to college, he was a seasoned t-shirt salesman.

Dov’s college roommate was a guy named Eric Ribner.

They were pretty different.  Eric rowed crew, while Dov rode a moped.  Eric went to bed early, while Dov was a night owl.

But the two became good friends, and freshman year, they ran a business together.  

ERIC: We started a t-shirt company. We made t-shirts that said Tufts

University in all different color combinations. So, I put up the money, he knew the manufacturer in Boston. He and I would sit at the campus center and sell t-shirts.

LISA: Within a few weeks, they made 4,000 dollars.

But Dov didn’t want to just buy other people’s shirts and resell them — he wanted to make his own. So when Eric and many people in Dov’s class went to study abroad their junior year, Dov went to rural South Carolina, to learn about the textile industry.

Dov returned to school for his senior year. But one day, he was sitting in the campus center, and he decided he was just ready to go. He hopped in his car and called his mom from the road.

SYLVIA: And he says, “Mom, I’m on my way. I’m on my way to South Carolina.” And I said, “Dov, it’s the end of the term, you’ve got to finish school.” And he said, “Don’t worry about it, mom. I’ll finish, I’ll finish. But I’ve got to get their fast, I’ve got to manufacture.” And he went there. And, you know, what could I do?  

LISA: Dov ended up spending the rest of his 20s in the Carolinas, building a company called Acme Shirt Company.  He learned the trade from older Southern guys who had been in the textile industry for generations.

DOV: There was Stickley Yarns — Jack Stickley — sold me yarn for a buck twenty.  And there was Joel Harrison who had a barn in a town called Ninety-Six, South Carolina. And in that barn, there was 20-30 sewing machines, and that’s where I sewed my first t-shirts. That was very similar to this one, almost identical.

LISA: Dov pulls at the t-shirt he’s wearing … a thicker more structured fit than today’s typical American Apparel t-shirt. It’s part of the new line he’s developing for his new company.

LISA: Can you tell me how you become such a nerd about t-shirts?

DOV: I was a little bit smaller than the other children. And I found that in the States, I was able to find my size. But my size was not available in Canada. And so, um, I started to really study t-shirts and it’s the American iconic t-shirt, Hanes t-shirt. But I liked how it fit me. It was at the time I think I was pursuing more of a James Dean kind of… but I was like… small.

LISA: Back in South Carolina, Dov studied how to knit his first rolls of combed cotton rib fabric. To gin up business for his young company, he’d go to tradeshows. Dov didn’t have money for a fancy booth so instead he’d walk the show and pass out samples from his gym bag.

At one of the shows, Dov met a guy named Rick Klotz. They were at a party, and Rick was standing on the second floor balcony, looking down on the dance floor.

RICK: I saw this guy, just jerking all around, and dancing like a, like wild. Like a complete nerd. Like, he he didn’t know how to dance, but he was doing it and he didn’t care what anybody thought of him. And I tapped my friend’s salesman on the, on the shoulder, and I said, “Hey, isn’t that that guy that was trying to sell his T-shirts earlier today?” He said, “Yeah yeah.” And uh he caught my eye. And he looked up at me and he you know, pointed at me like this, like maybe like Jerry Lewis would in uh in one of his movies. Like, “Hey!” And I kind of kind of fell in love with him at that very moment, to tell you the truth and because, you know, he was a little different.

LISA: Rick and Dov became friends. Rick lived in Los Angeles where he ran a successful clothing business selling streetwear. Dov was still in South Carolina where his business was struggling.

It was the late 90s, a bad time to start a t-shirt business in America. Top brands like Fruit of the Loom and Hanes were moving their manufacturing overseas. Dov couldn’t compete with these established companies. And in 1996, his company declared bankruptcy.  

After the bankruptcy, Dov moved to LA and started working on his next project… It was a women’s t-shirt that he’d been tinkering with.  

Dov crashed with his friend Rick. He didn’t have money to hire fit models, but he knew where he could find women to try on his new t-shirt. A place just down the street from Rick’s apartment.

RICK: Well he had the balls to bring pieces into a strip club, and ask girls to try

them on, and do the fittings for him. Can you imagine? Like, “Hey! I got a box of t-shirts, can you try them on?” you know? “How about these halter tops?” He didn’t care, like you know, I was a little embarrassed going into a strip club and asked somebody to try on stuff. But no, he’s not.

LISA: And it was just trying to find the right fit. Almost like it was in product development stage. It was testing?

RICK: Yes you know and it’s Dov. He works quick. He wants answers quick. He wants to go over it. He’s very neurotic about it — as he should be. And I guess a club full of girls is an easy place to do fittings you know, quickly.

LISA: Right around this time, Dov launched a new t-shirt company. And he called it American Apparel. One of its main products would be this new women’s t-shirt. More fitted. Softer. And made right here in America. In a factory off the freeway in LA.

But American Apparel in the beginning was purely wholesale. A commodity business, where customers mainly cared about price. He had to keep his costs down however he could, and when his suppliers stood in the way of that, things did not go well.  He talked to my producer Kaitlin Roberts about it.

DOV:  I would just blow a tantrum. I remember walking into this guy’s office and was like, “WHO’S THE SUPERVISOR?” you know, “WHO’S THE BOSS HERE?” you know, and it’d be like this Korean man that doesn’t speak English. I was just screaming and yelling so much that I guess I bullied them.

KAITLIN: Really?

DOV: Yeah, and then they said they couldn’t do the finishing the way I wanted it, that it’s not possible. I said, “What are you talking about? I finished this fabric, okay, every day, alright, in South Carolina and I get 5% shrinkage. Don’t give me that we have to have 10% shrinkage. You don’t know how to use your machines, okay,” and they, you know, I would just flip these tantrums like a crazy kid and I started to get my way.

KAITLIN: They responded well to the bullying.

DOV: Yes! Yes. Emotion. It works, okay. It’s not bullying, it’s passion. They love it.

LISA: Within a few years, Dov was working out of a factory in Los Angeles and employing dozens of people. He was bringing in millions of dollars in sales.

DOV: And it went from 10 million to 20 million to 40 million to 80 million to 100

million, and nothing could stop me.

LISA: Dov was making 100 million dollars but he was making it running a wholesale business. He was selling blank t-shirts to churches, schools, bands. Outside of a few apparel industry insiders, most people had never heard of Dov Charney.

That was all about to change.

That’s coming up, after the break.

-BREAK-

LISA: Welcome back to StartUp.

By the early 2000s, five years into running American Apparel, Dov decided to make a big change in the company. He wanted to make the leap from wholesale to retail — from selling t-shirts in bulk to businesses, to selling directly to consumers. So he called his old college roommate, Eric Ribner — Eric was now working in New York, on Wall Street.

ERIC: I’ll never forget when he called me up and told me to go down to Broadway and Astor place and he’s like, “I’m opening up a retail store. On Astor Place.” And I said, “What, you don’t know how to do retail. What are you opening up a retail store for?” And this was after American Apparel was going and his wholesale business was building. And he’s like, “I’m going into the retail business.” I’m like… and I said, “It’s not your core competency. You gotta stick to your core competency.” It’s a business school term I remembered. And he had never heard that term until I used it, and he’s like, “Well, I’m opening up a retail store.”

LISA: But Eric was right. Dov didn’t know anything about starting a retail business. Then, one day, Dov was introduced to a woman named Tacee Webb. Tacee had built a successful career in fashion. She had 10 years of experience in retail. She’d been on the front page of the Wall Street Journal. And when Dov and Tacee first met, she was not impressed.

TACEE: I mean, I was very fashionable. I’m gonna sound judgmental but Dov had, you know, bad taste. I mean it’s kind of as simple as that. Dov was a guy who knew everything about manufacturing. He was excited about the fashion industry, but at the point when I became involved, honestly he didn’t know kind of the proper terminology for any items.

LISA: But Dov made his pitch to her, come work at American Apparel, help me build a retail empire. Dov told her about his factory in LA … which employed immigrant workers … at good wages, in good working conditions. Tacee was in.

TACEE: I wanted to be a part of what Dov was doing. It felt like we were involved in a very noble mission. Especially at that point with the atrocities that were happening in sweat shops. You know, the young women with crippled hands in their early 20s. People being put out to pasture. People in factories in China, living there and never seeing their children. You know, this is stuff that the media was for so long turning a blind eye to but we all knew it was there. Even very expensive garments. There were no alternatives.

LISA: Dov’s idea was to take the mission and make it part of the brand … he emphasized the fact that consumers could feel good about the conditions their clothes were made in. And he focused on basics — t-shirts, hoodies, leggings — using simple designs. No logos. In all different colors.

The brand caught on. Stores were popping up in young, urban areas — Echo Park in LA, Williamsburg in Brooklyn — and Tacee was part of that — she scouted new locations, negotiated leases and organized contractors.

TACEE: Everyone wanted us. People were courting us from all over the country. People wanted to invest. People wanted us to open in their mall. People were willing to finance every location. Like, you walked in and said you were with American Apparel and they were just rolling out the red carpet. You want 3 months free rent? We’ll give you 6 months free rent. Everybody wanted to be part of what was, you know, feeling like more than a brand, it was really feeling like a movement.

LISA: Sales soared. By 2005, Dov had opened more than 100 stores in countries around the world.

DOV: I remember opening stores in New York like a drunken sailor and it worked. You know those guys that roll you around on the bicycle, and you know what I mean, in New York City, in the winter, you know, the bike where you zip it up.

LISA: Pedicabs?

DOV: Yeah, I used to hire one of those guys and go up and down the streets looking for stores. I’d look around, I’d check I’d check I’d check I’d check… That one! It worked, ‘cause I could stop the pedicab, like, stiffer than a, you know, than a taxi. And I’d rent stores, and my stores in New York were very profitable. Made a lot of money in New York City. A lot of bread.

LISA: As the company grew, Dov became as detail-oriented about his stores as he’d been about his t-shirts. He’d leave LA for weeks to visit stores around the country and evaluate how they were performing.

Dov would look at their sales and inventory.  But he’d also examine the stores’ look. He’d debate whether the store had the right mannequins in the window, or how a neon sign was hanging on the wall.   

And if a store was messy, Dov would get angry, and then he’d get down on his hands and knees and clean the store himself.  

All the details had to be on brand, including the way his employees dressed.

Dov cultivated a very specific American Apparel look. And everyone — models, retail employees and people at the corporate headquarters — were expected to meet these standards.

I talked to several former employees who described how Dov wanted them to dress and groom themselves.

WOMAN: He, like, really wanted people to look a certain way like your eyebrows

needed to… you couldn’t over pluck them, you couldn’t draw them in. It had to look like Brooke Shields’ eyebrows. Like he literally sent out a photo of her eyebrows saying, “This is how they should look.”

TACEE: He would tell people pretty openly to leave their hair natural. He would tell people pretty openly not to, uh, get rid of their body hair. He definitely does not like tattoos.

WOMAN: He wanted like everyone to look like they were from, like, the 70s or 80s. And, you know, everyone had to be dressed impeccably.

AMY: Did you buy that shirt at Target? We can tell. Like, Target is a big no-no. Fast fashion is a big no-no in the community.  

SPRING: He would say, “I don’t really like this person’s style. Like, I don’t think that he’s wearing the clothes appropriately.” Like that, you know? And so, even from the very beginning, he was already thinking, um, about branding and standards.

TACEE: There were definitely women who were hired based on looks.

LISA: This is Tacee again. She’d been in the fashion industry long enough to know that looks did matter. But it was difficult for her to see people getting hired at American Apparel who really didn’t have any skills.

TACEE: I think the hard part for me, as someone who really defines herself as a feminist, was to watch a woman based on her appearance and also potentially her sense of fashion advance over another person that had better experience. It was just like, are we sure that this person is actually qualified to get this work done, or, do they just look really hot in those jeans?

LISA: Tacee wasn’t the only one who said this. We’ve talked to people who went from stocking shelves in their late teens and early 20s to —  almost overnight — working at corporate headquarters managing a big budget or weighing in on important projects

Dov says hiring people without experience was part of his plan.

DOV: I was finding people in the street. I could take someone that’s had no experience in something, but they have the natural ability to merchandise a store. It could be a woman could be a man, but I’ll just give  you you know stereotypical story of a young woman. They say, “Can you organize that wall just use your instincts organize that wall of socks and hosiery. I’ll be back in an hour.” And you’re paying her nine dollars an hour. And you come back, and that wall looks amazing. And the next day you clock the sales on that wall and it’s up 50%. Then you take a 47 year old, you pay him 500 grand a year. And they just can’t seem to score like she scored.

LISA: Did that happen?

DOV: Of course it happened. How do you think I built the company?

LISA: A lot of these young retail employees also modeled for the company. They were featured in billboards, store windows and print ads.  

American Apparel’s advertising campaign may be one of the most infamous in retail history. The ads were simple. There’d be a model, usually in front of a plain white background, with some text. The women in the ads looked like people you might see walking down the street in a hip neighborhood in LA or New York. They wore very little makeup. They were different shapes and ethnicities. They weren’t airbrushed to perfection. They looked real.

In most of the ads, they were in sexually provocative positions, scantily clad. There’d be a woman going topless to advertise a pair of socks. Or wearing an American Apparel bodysuit with her legs spread. The line read: now open.

Some people praised the ads and saw them as symbols of sexual freedom. Other people thought the ads went too far… people like Sylvia, Dov’s mom

SYLVIA: I come from a feminist moment in history. And, as women, we really were fighting the notion of being objectified. And when I would see some of the ads, I felt that that that’s what it was doing. But when I spoke to some of the women in American Apparel, they would say that they felt empowered. And they would talk about how some of the ads were parodies. And they felt that they were taking this on. The idea that they felt empowered, I didn’t agree with. But I understood it. And I could understand what my mother felt like when we took off our bras, wore miniskirts and, you know, uh, the 60s. I was very much part of that.

LISA: Like, what, I mean, when you would see an ad that you thought maybe went too far, what would you do, would you just call—

SYLVIA: I’d call Dov and say, “Dov you’re going too far.” And he’d say, “Wait til the next week, wait til next week, we’ll have another one.” I mean, I talked a lot to Dov about it. I talked to the staff about it. I felt that particularly since so many young girls were going to the stores, but  certainly nothing I was gonna say was gonna change anything. You know, there’s a certain point you gotta let go. Your children are out in the world, they’re going to do what they’re going to do. Sometimes I was embarrassed by them, but other times I thought they were brilliant. So you know it wasn’t like I was critical of all of them. I just… I just thought that it was not necessary, but it was getting attention.

LISA: By 2005, Dov also started getting attention for something else. Three former employees accused Dov of sexual harassment. One suit also named the company.  The lawsuits claimed that Dov had created a sexually hostile work environment by doing things like instructing an employee to hire a quote “hot” woman, exposing himself to an employee, and talking about women in crude and sexual terms. Dov denied the allegations. At the time, he called the suits a false attempt to extort money from his company and exploit his transparent persona.  The cases were settled out of court.

Around this time, a reporter named Claudine Ko wrote a story about Dov and American Apparel for Jane Magazine. In the article, she recounts how over several days of reporting, Dov repeatedly masturbated in front of her.  Dov didn’t deny it.  He later told the New York Times that any sexual activities described in the Jane article were consensual.  We reached out to Claudine.  She didn’t want to talk about the article on tape. But she says that word, “consensual,” is misleading. She stayed in the room to do her job as a reporter.

The article led to a lot of negative publicity.  But some people in the apparel industry say that piece put Dov on the map. Controversy became part of the brand, and Dov leaned into that controversy. The advertisements became even more provocative. Many photos were taken in apartments and bedrooms and suggested the photographer was capturing a private moment.

For many of these photoshoots, the photographer was Dov.

TEENA: He saw the world from a very sexual, powerful place for a while, at least that’s what I saw in his pictures. Like his pictures were, they spoke volumes and it was just like, the fact that the girl’s … I don’t know, the girl’s mouth was open a certain way, I don’t know how to explain it.

LISA: This is Teena Pugliese.  She worked in the video department at American Apparel when Dov ran the company.

TEENA: The photography was what made him so powerful in a way, because it was so controversial. And it, I mean — eh, I don’t know what I should say. Uh… the girls look like they were having sex, you know like, in the pictures. That’s what it was and I think that’s what he wanted to capture.  

LISA: Can I ask you a question, though? Okay, so Teena you just said um, like one of the things about the billboards is that, like these women look like they had just had sex.

TEENA: Yeah, or were having sex, yes. Yes.

LISA: So, they looked like they were just having sex. Were they just having sex?  

TEENA: I don’t know, I don’t know. But I think that perhaps that’s what made them so interesting. Girls in their underwear, it’s been done before, like, it’s not that new, but there is like a visceral realness in those pictures. And, and for me there, there’s emotion attached to those pictures, there’s something more going on than a pretty girl in front of a camera.

LISA: So, what was going on in those photos? What was it like to be that pretty girl in front of the camera? And what was Dov’s role in all of this?  That’s coming up on the next episode of StartUp.

-BREAK-

LISA: StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Molly Messick, and Simone Polanen. Our senior producer is Kaitlin Roberts.

We are edited by  Alex Blumberg and Alexandra Johnes. We also want to give thanks to our editor over the last year, Peter Clowney.  He’s leaving Gimlet this week and we wish him the very best.

Fact checking by Michelle Harris. Special thanks to Rachel Strom, Christine Driscoll, Sruthi Pinnamaneni and Marianne McCune.

Mark Phillips wrote and performed our theme song. The new version of the theme song by the peerless Bobby Lord. Build Buildings wrote and performed our special ad music.

Original music by the band, Hot Moms Dot Gov, which includes The Reverend John DeLore, Jordan Scannella, Sam Merrick, Isamu McGregor, and Curtis Brewer. Music direction by Matthew Boll.

Additional music by Tyler Strickland and Tom Bromley.

Martin Peralta and Andrew Dunn mixed the episode.  

To subscribe to the podcast, go to iTunes, or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter, @podcaststartup.

Thanks for listening. We’re off next week; we’ll be back in two weeks.

We do our best to make sure these transcripts are accurate. If you would like to quote from an episode of StartUp, please check the transcript with the corresponding audio.

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