American Apparel Inc. needs to come out of bankruptcy quickly with a much stronger international presence and a familiar face at the helm – ousted founder Dov Charney.
That’s the vision of the man who wants to buy the beleaguered downtown L.A. retailer.
His name is Chad Hagan. He’s the lead investor in a $300 million bid to buy the distressed company, and he sees Charney as key to his investment group’s recovery strategy.
“Dov created that company, moved it from a room to a small business to a midmarket business and finally a public company. He just needed better lieutenants behind him,” said Hagan. “We plan to bring him back in a co-CEO position so he can continue to do what he did best, which was to be a merchant.”
He added that Charney supports his investment group’s plan, which in addition to giving Charney a partner to help him lead the company includes retaining American Apparel’s brand message of local manufacturing as well as opening more stores in Asia and emerging countries.
“We’re going to do our best to put the empire back together in a smarter and leaner fashion,” Hagan said. “We want to keep the jobs, the name and the business. The brand has a lot of value – it’s the most relevant of American brands built in the last 30 years.”
As managing partner of investment firm Hagan Capital Group/HCG Inc. in Roswell, Ga., Hagan is being joined by Silver Creek Advisors and the firms’ joint venture, PressPlay Group, in the $300 million bid to buy the distressed company out of Chapter 11 bankruptcy. Silver Creek is, like Hagan Capital, a family office. Their bid is the only one that’s been publicly announced.
Hagan’s group, however, faces an uphill battle for the company, which ousted Charney as chief executive in December 2014. American Apparel and its board have rejected the offer, he said. Meanwhile, a Delaware bankruptcy court this week is scheduled to consider approving a reorganization plan that the clothing company, bondholders and its unsecured creditors have approved.
Charney is crusading for Hagan’s bid by filing legal motions with the court, asking it to delay the Jan. 20 hearing and intervene in the case and force American Apparel and its creditors committee to reconsider Hagan’s offer.
Hagan’s group has Charney’s backing, as the ousted chief executive would get an ownership stake in the company. Charney’s shares were wiped out when American Apparel filed for bankruptcy.
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