American Apparel founder Dov Charney is back with a new T-shirt business he says is already worth $30 million

Dov Charney, the founder of American Apparel who was forced out of the company in a 2014 boardroom coup, has a new gig: He has started a T-shirt company with some of his old colleagues from American Apparel, and is already shipping merchandise. Charney believes he can hit revenues of $30 million with a year, he told Business Insider.

Charney declined to say the name of his new brand, although he has begun publishing photos on a website titled “That’s Los Angeles.” His brand will be inspired by the small, independent, immigrant, and working-class retail shops of the less glamourous side of LA, typified by these photos:

“I have a secret factory, I don’t subcontract,” he says. “I have about 40 workers.”

Right now there is no internet site and no consumer retail side of the business. He is only shipping wholesale orders to customers who know him personally.

Initially, Charney is focusing on T-shirts — the product he launched American Apparel with in the 1980s. “We’ve developed some new shapes and new bodies. T-shirts are very specific. Two T-shirts look the same from afar but up close it’s two different movies. There is something different about them even when they are the same brand, same size, same colour.”

American Apparel T-shirts became popular because Charney pioneered a tight, fitted shirt in an era (the 1990s and early 2000s) when most T-shirts were baggy. He also gave men’s versions longer torsos, for a more flattering look. Now, Charney told us, he is trying to find a new T-shirt fit “for the next decade.”

Charney is keeping the “made in Los Angeles” ethos that he championed with American Apparel, by refusing to employ overseas garment workers even though it would be cheaper. He believes owning a factory in the US with properly paid employees lets him turn around orders faster, and in smaller custom batches, than if he had to order them from Vietnam.

The business will be built around “rapid reaction” and “dynamic supply” — a market where a vertical garment manufacturer in LA can still beat a cheaper, larger one in China.

He has a small amount of investor financing. Some of his financing has come from his own workers, who have made a loan to the company. Charney says he intends to eventually offer those workers equity in the company. He declined to say specific numbers.

Charney will also be seeking investors from Main Street, possibly via crowdsourcing, because institutional investors are too scared to be involved with him anymore. (Charney’s marketing at American Apparel was hyper-sexual and he was also sued several times by employees who alleged harassment; most of those suits were settled or thrown out.)

“Certain institutional investors are scared based on — I’m not the most institutional option you know what I mean? The unpredictable nature of my business and the manner in which I carry out my affairs and my whole contrarian vision it’s not conducive to the institutional model. … they’re looking for predictability and my whole business thrives on unpredictability.”

We asked Charney if he had also changed his personal behaviour. At American Apparel, he often dated the models who appeared in his campaigns, a habit that attracted negative publicity. Charney felt that his personal life was nobody else’s business.

“I’m sticking to my first principles. I don’t believe my behaviour was bad. I don’t think I was a bad person. I’m passionate. I’ll tell you how I roll — it’s a lot of work. There’s not a lot of time for play. It’s a seven-day, 365 effort. There’s a myth and there’s a reality. There’s also the reality of a man’s age, you know? I’m 47. I don’t think I could keep up with the myth even if wanted to.”

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