How to Do Damage Control at American Apparel

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July 10 (Bloomberg) -- New York University School of Business Professor Scott Galloway discusses the impact CEO Dov Charney’s ouster at American Apparel on the company. Galloway speaks on “Bloomberg Surveillance.” (Source: Bloomberg)

You're trying to explain it?

Hunter s. thompson said that when things get really weird, the weird go pro.

In the latest twist, the company is saying that chinese still the ceo because they failed -- the company i -- that dov charney is still the ceo.

One of the things that triggers a default is the replacement of the ceo.

So now they're saying that dov is still the ceo.

When you are a board member, you have a fiduciary obligation to other shareholders.

Dov has become a distraction at the end of the day and it is time for him to move on.

Part of the appeal of american apparel was the very targeted kind of sleaziness that he brought to it.

Can the brand continue without him?

Is it possible to divorce the two?

There is no shortage of sources of sleaze.

If you are looking for some provocative, sexually charged appeal to the brand, dov does not have a monopoly on that.

It is time for him to move on.

I was a founder who was kicked off the board of my company.

At the end of the day it was a distraction.

It is time for him to move on -- and it didn't help the company.

Honestly, scarlet, it didn't. brendan brought up this sleaziness factor and that is one thing that is distinctive about it.

The other thing is that it is made in the u.s., the part of the identity.

Without the sleaziness, or least the dov charney brand of it, and without made in america, what is the company -- what does the company have going for it?

It has the made in america, it has this calvin klein-like eroticism that pushes boundaries.

But it also has this sideshow between the board and the ceo, which is not adding any value of the company to shareholders.

They need to have all hands on deck focused on the company, the merchandise, getting people in the stores, the stock price above one dollar, getting this thing going so that they can maintain those workers in america.

Can american apparel use this drama in any way, all the back-and-forth with the controversial founder, to its advantage?

I don't think so.

I think this is everybody looking that.

-- makes everybody look bad.

This is not a brand-building event.

Standard general has 3 board seats and that has -- that hedge fund has been supportive of dov charney.

Is it possible that he gets back in with the support of a new board?

I don't think so.

I think someone will take the keys away from dov.

They have been careful to say that this investment and our association is not an endorsement of dov's roll out the company.

It is time for him to move on and the best thing for the company would be for him to move on.

You have been very clear that there is no upside for the company, but to people walking in the story even know who he is an care about this thing we have been talking about?

At the end of the day it is about the merchandise, but this sideshow has become a distraction of what are probably very good evil at american people -- very good people at american apparel trying to get on with the business.

This is a huge distraction, this corporate warfare in the boardroom.

It is a distraction.

Let good people get back to work and keep those jobs in america.

Left unchecked, it could lead to that brain drain you were referring to.

Let's get to our agenda, where we look at stories that will be shipping today.

Towofold.

Dow futures down 150 points.

When you and i got in -- i don't want to say how early that was -- they were barely down at all.

It has been a nosedive.

And as guy johnson pointed out of london, it is all linked to a missed bond payment by portugal's second-largest bank.

Part 2 of my agenda is that perhaps we will get some sort of glimmer of hope and 8:30, with the bloomberg economics survey.

This is a survey sent out to a number of hedge funds, etc.

I'm on the resumption's about -- on their assumptions about unemployment, gdp, etc., and if

This text has been automatically generated. It may not be 100% accurate.

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