American Apparel Loses Second CEO In Under Two Years

Paula Schneider — the American Apparel CEO that took over the helm after founding CEO Dov Charney’s rather dramatic exit in January 2014 — will depart her leadership position with the firm on Oct. 3, according to reports that emerged over the weekend.

Chief Administrative Officer Chelsea Grayson is reportedly already working to transition into the CEO position.

Schneider wrote in her letter of resignation that the firm’s efforts to find a buyer for some or all of its assetts left her unable to pursue her objectives.

“[T]he [turnaround] plan has been laid out, and much of the heavy lifting and the hard work has been done,” the letter reads. “[T]he sale process currently underway for all or part of the company may not enable us to pursue the course of action necessary for the plan to succeed nor allow the brand to stay true to its ideals. Therefore, after much deliberation and with a heavy heart, I’ve come to the conclusion it is time for me to resign as CEO.”

Schneider’s resignation marks the second high-profile leader the firm has lost of late. Paul R. Charron, former Liz Claiborne chairman and CEO and American Apparel’s chairman of the board, also recently announced his resignation (he has only served since March).

The resignation of Charney’s successor has led some to speculate if Charney’s bid to take over his former firm in bankruptcy court’s central claim perhaps had some merit: Charney claimed, simply put, that American Apparel could not survive without his leadership. The judge in the case, Brendan Shannon, said no to Charney’s attempt to take over the company; he didn’t find that particular claim compelling.

Then again, the forces that have hit American Apparel hard may have been even beyond Charney’s ability to controversially innovate his way out of. Fast fashion has very much changed how younger consumers shop, where they shop and how much they are willing to pay. Also, Charney’s main innovation — hyper-sexualized with very young models — is not quite the game-changer it once was. Lots of other firms followed suit, and the consuming public is now more bored than scandalized.

And despite Schneider’s departure, it seems unlikely that Charney will return, as he is currently focused on starting a new t-shirt company. He hasn’t entirely closed the door, however. He has told some media that he would consider it after seeing the asking price and inventory.