American Apparel CEO Dov Charney did not fail to live up to his reputation Tuesday in a frank exchange with CNBC reporter Jane Wells -- the first interview he's given in years.
In response to Wells saying that there have been a lot of sex-based lawsuits brought against him, he said, "That’s also a testimony to my success, though, the fact that I’m a target for baseless lawsuits."
Wow. And in response to her question as to why he insists on a "Made in America" business model that "at the moment, is unprofitable," Charney's answer was equally baffling:
I think you're casting it in the wrong light, that it's unprofitable. From the accounting perspective, ten, twenty feet up, yeah, it's unprofitable. If you get down at the numbers, our gross margins — I'm talking about the cost versus the selling price — our gross margins are as high as a luxury brand like Prada.
He went on to boast that the company's "financial paradigm has completely stabilized." When the statement raised Wells' eyebrows, Dov quickly conceded with a guilty grin, "We're paying somewhat of a subprime interest rate. Our average borrowing costs are 14%." He also admits the company is still in the red.
For the love of neon spandex, why did Charney think it was a good idea for him to speak publicly… about anything? Possibly because of the recent (and rare) positive news coverage that a judge threw out a lawsuit brought by a 21-year-old alleging Dov forced her to be his "sex slave."
Or it could be because of the $80 million credit line that the company received from a George Soros-backed firm last month? A couple weeks later, the hipster CEO signed a three-year deal with the company guaranteeing him a minimum base salary of $800,000, according to New York Magazine.
One thing is certain. If Charney is ruffled in the slightest by the sexual predator accusations that have been hurled at him for years, he doesn't want us to know about it. The only concession he'll make, as he did to Wells, is "I like weird."
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