10 Reasons Why American Apparel's Dov Charney Is A Brilliant Leader

Dov Charney In An American Apparel Meeting

Photo: dovcharney via Flickr

Dov Charney, founder of American Apparel, is one of the most eccentric and controversial CEOs in America. He’s constantly caught in headlines for sexual harassment and is blamed for pushing American Apparel to the brink of bankruptcy.But in spite of these troubles, Charney is in many ways brilliant businessman.

He built American Apparel from a single store in L.A. into a global name brand, now with 254 retail stores in 20 countries — thanks to his ability to execute on his vision for the company.

“I want to be remembered as one of the great CEOs of our time and of my generation. And I think that I’m gonna make them proud,” he once said. “That’s my plan.”

One word: Streamline

American Apparel created its bestselling items by turning unused clothing scraps into underwear, bikinis and cords for hoodies. Remaining scraps are sent to a recycler, turned into thread, and reused.

As Charney sees it, 'Engineers and designers and finance people and knitters and dyers and chemists can come together in one location and say, 'How can we do this better?' You can produce products more efficiently than they can be made on an outsource basis.' (20/20)

Source: 20/20, Inc.

He hated the idea of displaying the American Apparel logo on his shirts -- so he focused on the product instead

He interviews his staff and models himself

For better or for worse, he's known for finding models while strolling the streets, and is well-known for jumping out of his limousine to recruit a potential model with the right 'attitude and style' walking by.

'What I'm looking for is style -- that's not something you can teach a person,' Charney once said. 'You have it or you don't. Let's say one girl has an acne problem but good style, while another is beautiful but has no style. I'm picking acne!' (Inc.)

Source: 20/20, Inc.

He made the bold decision to move manufacturing operations from Mexico to Los Angeles

In its early days, American Apparel manufactured in Mexico, but the clothes didn't meet his standards so he moved his operations to Los Angeles.

By the early 90's, Charney sought out industry veteran Marty Bailey (now his chief manufacturing officer), who restructured the garment supply chain with a 'team manufacturing' concept, placing workers in groups of 10 to work on a single garment. Thanks to his work, the American Apparel factory went from producing 30,000 garments to producing 90,000 garments.

Source: IdeaCity, Inc.

By keeping manufacturing in L.A., Charney is able to control and fine tune what happens on the factory floors

American Apparel is famous for its 'Made in USA' label. Charney loves the idea of coming up with an idea, and being able to mass produce in a short period of time. He frequently cites his vertically-integrated manufacturing system as the key to American Apparel's success.

'If you're working with a supplier in China, you've got to work months in advance,' he said. 'If you're working with your own factory, you can wake up one morning and say, 'Hey, let's make 10,000 tank tops today.'' (20/20)

Source: 20/20, Inc.

Charney considers his target customer 'contemporary metropolitan adults.'

He uses simple, authentic photographs of regular people around him -- including 'real' people with imperfect with blemished skin. Charney often takes the photos himself.

'The key to retailing or the key to designing a product is 'know who your customer is,'' he says. (Charlie Rose Interview)

Source: Charlie Rose Interview, New York Times

Charney makes sure that his employees have his cell phone number and that they can reach him anytime

Though he's been under fire for his hiring practices, he's also known to treat employees well

American Apparel has been called out for hiring illegal immigrant workers. However, they're paid well, and they have perks like earning bonuses for productivity. Charney strongly opposes exploitation of laborers, and says that even if he manufactured abroad, he would continue to pay those workers American wages.

However, he's also been criticised for being discriminatory in only hiring good-looking staff-members.

Source: Evan Carmichael, 20/20, IdeaCity

He rarely checks his voicemail and never apologizes for taking a call during a meeting

When he's in New York, he typically starts his day close to noon. Sometimes, this way of operating has gotten him into trouble, but he insists on doing things his own way.

'This creative environment is what got us to this point,' he's said. 'We certainly aren't going to stop doing it now after we created a highly profitable company.' (20/20)

Source: 20/20, Inc.

He started his business in high school, and hasn't compromised his vision ever since

But in recent years, Charney has faced an uphill battle

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