American Apparel Founder Fights Back

Founder & former CEO Dov Charney launches a bid for the retailer.
5:43 | 12/19/14

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Transcript for American Apparel Founder Fights Back
Okay. It's Friday December 19 the markets in New York are open and big number this morning to a 44 million. That's the amount cash strapped for each other American Apparel is worth according to reports to take over bid diamond the company at a dollar forty share. The funny part about who is behind that bid. The founder of the newly ousted CEO Dov Charney. A bit of an outlandish figure in the retail world looking to regain control of that made an LA clothing company. When I'm down Butler and New York here's the details on what dubbed Charny is up to Yahoo! finance is Jeff MacKey mr. acting happy Friday morning to you. It's nice to see again I've Fran good to see who is well it is Bennett's bid at a time there's so let's get to those who I was has been exactly working. Well it looks like Doug Charny is partnering with this Irving capital or Irving place capital. It's going to be providing the seed money and terms if this is true all of this alleged so far it's been reported by various sources. But if they bid would be for up Otto bock 32 dollar forty that's thirty to 40% above where the stock closed yesterday. It's interesting in the sense that charge was ousted earlier this week from the company for what they said was cause and I was got the full explanation I was a controversial figure. And that was the united that in point to any of the controversies that just that caused this be it would make a lot of sense actually etiquette and talk attorney reportedly yesterday. Not so much about this bid specifically about about his plans and his ouster from American Apparel. He took exception the idea that that he was done but the company entirely in this kind of put some pieces together. I hated it but would not let that short responses in the company that and because what's he been doing that over the years that that essentially warranted him to be pushed up by the board. Well you know it it's a cat have not safe for work type of search engine company that got some racy ads there's been some scandals and allegations. A lot of sexual harassment charges none of which have held up in court but they've been a distraction for the company. And that certainly been a headache for the company chart yes were to again yesterday. He says listen that he wants to design clothing. And he wants to be that in the face behind this brand its aisles are worth noting. You know if he's not there slightly whiplash of bad guy character. And he actually American a pair what you say made in LA if they actually make their clothes in Los Angeles which is extremely unusual in the apparel industry. We lost 80% of the jobs in the apparel industry manufacturer died sewing clothing. Over the twenty years from 1990 to 2010. American imperiled or an entire time was actually building factories and plants in LA all within thirty miles of one another. So there's not usual company but it's not so easy to dismiss them just as a salacious. Teen retailer that's fallen on hard times and in usual company and in usual man as well as he still the right guy up to lead this job until to lead this company. He's the right guy for a private company. He's a he's the right guy for someone at Eds this the public spotlight and operating as a public company. Makes you beholden to shareholders and all their causes all these different scandals that puts a spotlight where this company probably doesn't need it now I would suspect. That they eat the big here would not be putting turning control and a dictatorial position. But what rather sort of silo him him into the creative side into the manufacturing side. And perhaps what someone else in the CEO role he didn't seem to have huge consuming interest. To run this thing data dating to be the face of the operation to bring scandal back upon fact he seemed quite pained by the idea of the scandal being back on it. He wants to focus on the brand itself also excellent student of specialty retail ban. You know if he believes this company really ceases to exist via their Bev graveyards and corporate America are are full of specialty retailers. That lost their founding visionary and I tell you what it is not pretty they don't end well you've got up. A 180 stores you've gotten about a 100000 employees depending on the season. Those people really don't have a place to go attorneys not there has come here by the way of of several other retailers that have disappeared entirely. Look let's creating a put up before their time and time again bizarre off forever 21 unit clos I mean essentially they have kind of gone and and eating a lunch of America pero we know when that company's been sort of some Flannery at some times you bet it that's true what they've done those companies you mentioned are fast fashion and they've been able to turn. All of that Caroline and make it fast and stay in stock. On hot looks better than say that gap better than Abercrombie Abercrombie & Fitch in contrast another scandalous company CEOs ousted earlier this month. They have been trying to get out of logo Wear meeting of stuff that's as Abercrombie & Fitch and those letters for about a year which is just lunacy of fears are as a problem with a lot of airlines closed I'll get it out later that afternoon. And so American retail in general has gotten very slow. The distinction here is that you're not necessarily slow if your producing an American fact you make the argument it's faster what it is as more expensive. And you have to be able to charge a premium. American perilous spot on such hard times in terms of Dave Dave signs of bad debt covenants. They've got a lot of liabilities on a monthly basis is paying off those loans working against them. They really would be better as a financially restructured operation to see if they can play with those big dogs the fast fashion especially guys that are coming in largely from overseas. Motion have to wait and see exactly with future's gonna hold it for American Apparel and for mr. drawings up. Jeff MacKey forgotten finance mr. MacKey have a great holiday Soros could see you. New to my friend of course you can keep a latest headlines right here and abcnews.com. You know watching big number I'm Dan batchelor.

This transcript has been automatically generated and may not be 100% accurate.

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