A group of American Apparel workers demonstrated outside the company’s Los Angeles headquarters Wednesday to protest the decision by the CEO of the clothing manufacturer and retailer to declare bankruptcy.
The demonstration by the General Brotherhood of Workers of American Apparel targeted CEO Paula Schneider, who was denounced for her decision to take the company into bankruptcy, organizers said. American Apparel, which is more than $300 million in debt, filed for Chapter 11 protection in a Delaware bankruptcy court Monday after reaching what it said was a pact with 95 percent of the company’s secured lenders.
The General Brotherhood said it has organized more than 2,800 workers — a minority of the workforce — to form a union in some months to protest management’s “unfair labor practices.”
“The workers would like to see the return of American Apparel founder Dov Charney, the creative genius who built the company as a fashion icon,” according to the union.
American Apparel issued a statement saying the majority of its workforce has expressed support for the company’s turnaround plan.
“This restructuring will enable American Apparel to become a stronger, more financially stable company. Through the restructuring process, we will be able to refocus our efforts on the execution of our strategy to restore the company to financial health,” according to the company. “This protest, attended by a very small percentage of our workforce, represents the exception, not the rule. The behavior of this group is not representative of our loyal and deeply valued employees.”
The restructuring agreement announced earlier this week will take the company private and hand nearly 100 percent control to its largest bondholders.
Among the shareholders who will be forced out by bankruptcy proceedings will be Charney, who was ousted last year as chief executive and chairman amid allegations of inappropriate behavior involving employees and financial misconduct.
—City News Service