Sex sells, but what about sexual harassment?
That's the question facing Los Angeles-based American Apparel LLC, whose unorthodox chief executive, Dov Charney, is the target of high-profile sexual harassment suits by three former female employees.
Charney, who started American Apparel in 1989, has turned the company into the darling of the fashion scene, with his lines of trendy tight T-shirts and other casual clothes. Revenues are projected to rise 80 percent this year, to $250 million.
The company originally made a name for itself by paying its workers higher-than-sweatshop wages and by manufacturing locally. More recently, though, the company's sexually charged culture and Charney's behavior in particular is what's drawn notice.
Charney personally photographs the suggestively posed models mostly young employees whose pictures adorn the store walls and has admitted to sexual relationships with female subordinates. He also admitted to masturbating in front of a Jane magazine reporter writing a profile of him in what she later confirmed was a consensual experience.
However, the lawsuits accused Charney of non-consensual sexual behavior, including exposing himself to two employees and inviting one to masturbate with him. Charney adamantly denies any sexual relations with the three women, claiming that they are disgruntled former employees.
The industry verdict so far? If anything, the publicity and notoriety, including write-ups in The New York Times and Business Week, may actually raise sales among its customers.
"Maybe it even adds to the cache," said Ilse Metchek, executive director of the California Fashion Association. "You are dealing with a customer here who does not take those kinds of things too seriously."
Added Candace Corlett, a principal at New York-based WSL Strategic Retail: "You would have a hard time filling a paragraph with names of companies remembered as being reprehensible in their practices or offending consumers enough to impact their wallets."
As for Charney, he told the Business Journal that the claims would in no way alter the way that he or the company does business. "In my opinion, their lawsuits are a false attempt to extort money from my company and exploit my transparent persona," he said. "We are a rebel company, no question. We are a company that prides itself on doing things differently."
Goodwin Gaw, who owns the refurbished Hollywood Roosevelt Hotel, likes the buzz that the property's Tropicana Bar is generating, but he's not so sure about the noise.
Residents in a nearby apartment building have been complaining that the bar's music is too loud. Then there's grumbling that the suddenly trendy hotel might be giving regular guests short shrift in favor of celebrities.
Over the July 4th weekend, noise complaints led to the arrest of Tropicana Bar operator Amanda Scheer-Demme, who was released after posting $100 bail. That prompted Gaw to bring in sound engineers to study the bar's noise level, which he said is under 75 decibels, the legal limit.
"We try to address it as best as we can," he said, adding that management is now ensuring that noise generated from all events remains under that limit.
Complaints about the Hollywood Roosevelt don't end with the noise. The blogosphere is echoing with chatter that the hotel has become unfriendly to regular guests, who often find the pool and bar closed to private parties.
L.A. resident Waldo Hernandez, celebrating his friend's birthday, said he booked two suites, but was given only one small room without explanation. When Hernandez and his friends were eating and drinking in the room's patio around the pool, he claimed he was chastised by an employee for not patronizing the bar.
Turned off by the experience, Hernandez and his friends decided not to stay the night, even though the $340 room was paid for. "I don't think I will be back there in a while," he said.
Gaw brushed off the complaints, saying that the hotel has been a smash hit with celebrities and regular folks alike since its $21 million renovation. He estimates that its occupancy rate is 94 percent.
Boutique hotel operator Kor Hotel Group has taken over control of the Jefferson Hotel in Washington, D.C. as part of a strategic build-up of its hotel management contracts.
John Arnett, president of the Group, which owns the Viceroy Santa Monica and Maison 140 in Beverly Hills, said that being a third-party operator allows Kor to quickly enter new markets where hotel properties are often scarce and expensive.
Style-wise, the Jefferson marks a departure for Kor, known for the distinctive, modern work of Kelly Wearstler, who heads the Los Angeles-based design shop kwid and splashed the Viceroy Santa Monica with greens and grays. A yet-to-be picked designer will stylize the 100-room Jefferson, where renovation recently began.
*Staff reporter Rachel Brown can be reached by phone at (323) 549-5225, ext. 224, or by e-mail at email@example.com .
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