Would Reinstating Charney Help American Apparel?

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July 8 (Bloomberg) -- Kristin Bentz, founder and president of Talented Blonde, and Bloomberg's Julie Hyman and Barry Ritholtz discuss the outlook for American Apparel with Trish Regan on "Street Smart." (Source: Bloomberg)

Does it look like he might get his job back?

I would not hold my breath right now.

You know?

He is very passionate about what he does.

He is a brilliant merchant.

He is also completely wacky.

[laughter] hi, barry.

He has something to the lows about him, personally.

The stock has been on its back since like 2009. when you have a wacky ceo and profits are good, we are willing to put up with the.

That when things are shaky?

How wacky is lion capital?

They say they want his reinstatement.

The motivation is unclear.

Remember, standard general, the company that through him he increased his stake to nearly 50% of the company is backing him.

It is not clear if there are personal relationships at stake here.

The guy does have some special sauce, the problem is it has gone over the past couple of years.

If you look at the clothing it is not capturing what people want anymore.

The early sexiness of the advertisements, with charney taking a lot of the photos himself, a lot of that has worn off.

The coolness and edginess, people are sort of over it.

A little creaky.

Well, it was always a little creepy, but there was something edgy about it initially and now they need to find something else . whether that is through him or not, they need to find a different way.

What does it mean in terms of this actual loan?

It really depends on the specifics of the contract.

If the contract says -- if there is any change in executive management a can be called, then it can be called the.

If as the board is alleging, and you know more about this than me , that there have to be other factors.

It seems that there is a lot written in that makes it somewhat confusing about whether, indeed, they are in default.

The company says they are not in default until july 19. could someone just jump in and buy this company?

What about pe shop coming in and swooping it up?

Let me just by this company because it probably -- aside from the debt that it has a significant amount of, it is not trading at a high enough valuation to make it formidable.

Could someone by the brand and turn it around right now?

One of the best ideas would be to take it private at this time.

I think it would solve a lot of problems.

You know, it would make both sides happy.

The fast retailing out of the company in japan that i love, they own a lot of the stores with a similar footprint but they need a larger one in the u.s.. that could be of -- an idea for them to acquire it.

I think the going private would be the best idea right now.

It sounds like there are a lot of bad players here.

Are there any good guys?

Who should we be rooting for?

P[grunts] how much time do you have?

You so talented, so interesting, that is the hard part, you need a charismatic ceo tom a but also one that can keep their hands to themselves.

Doesn't seem like asking for month -- for much.

Can you help me out?

Exactly.

I like standard general right now, but i think they need someone to come in that is not going to take any guff and whip the company into shape.

What is it trading at right now?

$.85. there you go.

Are whopping $.85. so, private equity comes in to turn it around.

Julie, judging from what you have seen in terms of the brand and the disintegration, if you would, of this brand over the years, what does it need to do to make itself popular again?

If only that was an easy answer.

All of retailer struggling with this right now, particularly the ones that cater to retailers and young adults.

Look at the three a's, they are all having trouble right now and all of them went preppy at a time when it seemed like kids were sort of over that.

Now the question is -- where do they go from here?

American apparel falls into that demographic to some degree and has always skewed more urban outfitters in terms of style, but it needs to -- do they go back to basics?

That is what they originally did asked.

The resolution that works for the company is you take the talented designer marketer and you let him design and market, but you remove him as ceo.

He should not be doing the day to day execution logistics supply chain.

Clearly not his forte.

Let him do the design and come up with the marketing.

Can they allow that?

That is the question.

Look at the situation like a men's wearhouse, where you have the founder in their and you have a lot of tension between the chairman, the founder, and management of the company.

They get big and they suddenly have to play by the rules and a lot of companies struggle with that transition because the founders founded these companies in part it does they did not play by the rules.

A lot of them are really and truly characters, which serves them well up to a certain point.

Unfortunately, we are out of time.

What an interesting

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

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