The Little Boutique That Joined, Then Divorced, American Apparel

The founders of Oak, a small chain of fashion boutiques based in Brooklyn, are buying back their business after two and a half years under ailing retailer American Apparel. It ends a rocky saga for the tiny company unwittingly drawn into a dramatic battle among a corporation, hedge funds, and a scorned executive.

Back in early 2013, Oak was in trouble. After its launch in 2005, the retailer had success selling a mix of monochrome private-label items, such as $400 black varsity jackets and $150 gray pullovers, alongside styles from emerging designers. Squeezed by the recession, it became saddled with debt. Then founders Louis Terline and Jeff Madalena ran into Dov Charney, the founder and, at the time, chief executive of American Apparel at a party in Las Vegas.