American Apparel loses another CEO; Paula Schneider exits

Los Angeles - Another one bites the dust. Fashion retailer American Apparel has undergone a couple of massive changes over the past few years, including executive changes. Most recently, the Los Angeles-based company’s chief executive Paula Schneider has confirmed she will be leaving her post effective October 3.

Schneider joined the company two years ago as the chief executive. As of this Thursday, September 23, it has been reported by multiple sources that she will no longer lead the company. First reported by WWD, Schneider has confirmed her departure from American Apparel. When she joined the American Apparel team, her plan was to turn the company around. She came at a time when the basics apparel store was undergoing bankruptcy as well as shuttering multiple stores. Her goals for the company was to turn around the youthful retailer by closing underperforming stores and focusing more on stores that were better for the company’s overall business.

In her resignation letter, which was obtained by WWD, Schneider stated that while she is leaving, most of her plan has already been put in motion. “The [turnaround] plan has been laid out and much of the heavy lifting and the hard work has been done,” she said in the letter. With this said, her letter also states that the sale of the company may have had something to do with her departure. Because the sale will change how the company is run in certain ways, it’s understandable that it would be more difficult for American Apparel to carry out its plan in the way it was intended. American Apparel declined to comment on behalf of the company.

Chelsea Grayson succeeds Paula Schneider as American Apparel CEO

During her time at American Apparel, Schneider was able to contribute to change for the company. She initiated tactics including layoffs for the company, which was not seen as positive among many workers. Her departure comes after former Liz Claiborne Inc. chairman and chief executive officer Paul R. Charron, also left last the board month. Brad Scher, founder of New York consulting firm Ocean Ride Capital Advisors, took over the position.

Former chief executive and founder Dov Charney so far has not been involved in American Apparel since his bid to buy back the company last year. He partnered with Hagan Capital last year to buy back American Apparel for 3000 million dollar, although the deal did not go through. Currently however, Charney has moved on to a new apparel and retail project.

Schneider’s resignation will be effective on Monday, October 3. Chelsea Grayson will serve as Schneider’s replacement, fulfilling the role as chief executive officer. Grayson is no stranger to the American Apparel company as she was there through the retailer’s hardships including its bankruptcy filing. Previously, she has worked at Jones Day and Loeb & Loeb as a corporate attorney. Moving to American Apparel, Grayson served her roles as counsel and chief administrative officer.

For American Apparel’s future, at the moment it’s uncertain what will become of the iconic retailer. According to Apparel News, the company is expected to bring in less than 350 million dollars in revenue, which is roughly a little over half of what its annual revenue used to be. With struggling finances and turnaround of executives so often, the made-in-Los Angeles brand may continue to face more struggles ahead.

Photo: American Apparel