When Dov Charney’s mother called to check on him recently, she told the American Apparel Inc. chief something he needed to hear: that he’s a survivor.

The flamboyant founder of the hip apparel chain has weathered all sorts of challenges over the past few years, including a government audit that ultimately caused American Apparel to lose 2,500 immigrant workers.

But perhaps nothing quite like last week, when media reports suggested that the company was on its last legs and searching for as little as $5 million to stave off bankruptcy.

“American Apparel Really Might Go Bankrupt This Time” was the breathless headline on the Huffington Post. Even ABC morning anchor George Stephanopoulos called asking if he had time for an interview.

In the midst of it all, Charney sat down with the Business Journal to defend his company, his handling of recent events and his turnaround plans.

“I feel I’ve reached a level of personal maturity,” he said, “whereby in order to take this to the next level, I need to surround myself with people who are better than me in the fields that they operate.”

Known for its basic T-shirts and hipster clothes, American Apparel is struggling to recover from the recession, deal with rising raw materials costs, and hire and train replacement workers.

But it also has been hinted that Charney may no longer have his finger on the pulse of fashion.

This much is certain, Bank of America and Bank of Montreal have given the company until April 30 to prove it’s able to continue operating or they could call in their balances on American Apparel’s revolving credit facilities, which so far have been drawn down by $57.4 million.

The company said in regulatory filings that it may have to file for bankruptcy if business doesn’t improve, even though in his interview Charney said rising sales could change everything.

The turbulence is reflected in a stock price that at its height hit $15.80 in 2007, but hovered at 80 cents last week.

On top of it all, Charney has had to deal with the fallout from additional sexual harassment lawsuits, the most recent from yet another young former employee. She appeared on the “Today” show in late March to accuse the American Apparel chief of physically attacking her.

Charney was unrelenting in his defense of himself and his company during the interview, aside from acknowledging a lack of experience running a public company. (He eventually heeded calls for a change in management, hiring a team of veteran executives.)

He even boasted that not only will he turn around the downtown L.A. apparel manufacturer and retailer, but he is going to join L.A.’s shortlist of uberbusinessmen in the process.

“I’m going to be one of the billionaires in Los Angeles one day,” Charney said. “I’m only 42 years old; I’m very young for what I’ve done. I don’t know anyone else in my age category in apparel, most of the guys that are at my level are in their 60s. So I have time still to prove my point.”

Talking points

The two-hour interview was conducted last week at American Apparel’s headquarters, where Charney went from speeding through the company’s 800,000-square-foot factory, inspecting garments and personally directing employees, to munching on peanuts and pistachios before devouring a grilled-cheese sandwich, salad and chicken nuggets.

Outfitted in an American Apparel polo shirt and striped white and blue pants, Charney kicked off his boat shoes after the meal and sat down in his seventh-floor office, where he expressed an us-versus-them perspective.

“I don’t want the company to get taken advantage of by corporate forces or government forces or get taken advantage of by the lawsuit culture,” Charney said. “There’s a lot of sharks out there, there’s a lot of greed. I want to push that back, to keep the thing on course and make sure my workers are protected. I want an opportunity for my shareholders, and I want to try and balance all of those constituencies.”

American Apparel is not the same fast-growing company Charney took public four years ago. After opening 273 stores in 20 countries, things have slowed.

The recession resulted in sales declines, exacerbated by cotton’s rising cost and other problems. There’s even mention of closing a handful or so of underperforming stores.

Most significantly, the struggles have led to cash issues for American Apparel, which has hired investment bank Rothschild Group to find sources of capital. Still, Charney believes the company will see an uptick in sales as it launches a line of women’s jeans and Keds-style canvas shoes.

“Getting more capital, that’s in the realm of possibilities,” he said. “We also think that if the season is good, the cash flow will be less ominous.”

A source familiar with the situation said Charney might singlehandedly save American Apparel from its short-term cash crunch by pumping in several millions from his personal fortune in the coming weeks. He declined to comment.

Charney, American Apparel’s single largest shareholder, increased his stake to 57 percent earlier this month by buying 1.8 million shares at a premium and converting $4.7 million in notes he held on the company into equity.

Meanwhile, he has developed a strong relationship with Lyndon Lea, a partner and co-founder of London investment firm Lion Capital – a key lender that previously rescued American Apparel with an $80 million loan in 2009 when the company’s problems were really getting serious.

Lea and Lion co-founder Neil Richardson resigned from American Apparel’s board earlier this month, a move that led to speculation in the press that the firm is getting frustrated with Charney. However, Lea told the Business Journal that wasn’t so, saying the resignation would resolve certain conflicts of interest for the lender, which is also a creditor of American Apparel.

“I’m as supportive and respectful of the American Apparel brand today as I’ve ever been. I’m happy with my investment in American Apparel and I believe there’s an upside,” Lea said.

“Dov and I talk once or twice every single day. There’s no hostility between us whatsoever.”

New team

Charney recently surrounded himself with some experienced executives, which he acknowledged were pushed for by the company’s board.

He hired former JA Apparel Corp. Chief Executive Marty Staff as chief business development officer earlier this month. That followed the additions of former Old Navy executive John Luttrell as executive vice president and chief financial officer, and former Blockbuster Chief Financial Officer Tom Casey as acting president. Industry veteran Georges Atlan recently joined as director of denim.

Charney and his new executive team are now working nights and weekends – they’ll tell you working with Charney isn’t a 9-to-5 job – to get American Apparel back into the black after the company reported a net loss of $86 million last year.

“If you want a 9-to-5 job, this is probably not the right company,” Staff said. “But if you are passionate about clothes and stuff, it’s a great place.”

Charney believes sales, which dropped 4.6 percent last year compared with 2009, will rise as the company rolls out new products. He’s already been working to boost sales by making more sophisticated clothing such as button-down shirts, lace and chiffon dresses, and woven sweaters.

Meanwhile, Staff is exploring other ways the company can drive business, including wholesaling American Apparel-branded clothes to larger retailers and department stores. Another possibility is opening shops within shops similar to what the company has done at two Paris and London department stores.

He’s bullish on American Apparel’s prospects.

“Dov has staffed this company with stylish, beautiful, quick-thinking, fun people,” Staff said. “This is not a normal organization. People are passionate about the brand, and about Dov and about the product.”

Sexually charged

Still, there is the issue of the sexual harassment lawsuits. Charney was hit with a wave of suits in the mid-2000s that were either dismissed or settled. Two current ones include a second young woman who claims she was physically attacked by Charney.

Charney declined to discuss the specific allegations, but he and the company have vociferously denied them. His attorneys have called them an attempt to shake down Charney and American Apparel.

Lion Capital’s Lea is standing behind Charney, even though he admitted that the accusations aren’t a pleasant topic for any company or brand to be associated with.

“It concerns me as a lender. It concerns me as a human being,” Lea said. “Far be it from me to get myself embroiled in anything to do with this. I’ve heard Dov’s versions of events and it seems somewhat compelling to me, his version.”

The company’s attorneys are fighting to resolve the lawsuits, filed earlier this month in New York and Los Angeles state courts, through confidential arbitration.

American Apparel’s success has been driven by provocative advertising campaigns, often conceived and shot by Charney, featuring half-clothed models. More recently, the models have appeared topless in some ads.

Charney conceded that American Apparel’s image could be used against him in lawsuits, but he doesn’t regret marketing the company with sex. Nor does he ever plan to change his bachelor lifestyle, which he has admitted involved sexual relationships with younger female employees.

“We are a free society,” he said. “Of course it would be better if we never take chances, it would be best if we wore a straight jacket in a locked white room with no interactions. We could live a lot longer in captivity. But it’s live free or die.”