OPERATIONS

American Apparel ousts CEO/chairman Dov Charney on misconduct allegations

BY Marianne Wilson

Los Angeles — Apparel retailer American Apparel Inc. has fired its controversial founder Dov Charney as chairman, effective immediately, and has moved to fire him as CEO and president. The actions come on the heels of an ongoing investigation into alleged misconduct by Charney, who has been targeted in sexual harassment lawsuits and charged with allegations of misconduct for years.

"Charney will be terminated for cause after a contractual 30-day cure period,” the Los Angeles-based company said in a statement.

According to the Los Angeles Times, Charney’s behavior problems involved his personal conduct with women and poor judgment.

American Apparel has named CFO John Luttrell as interim CEO and has hired a firm to search for a permanent replacement. The retailer also appointed Allan Mayer and David Danziger as co-chairman.

Mayer, who has been a member of the board since American Apparel went public in 2007 and has served as its lead independent director for the past three years, said the board’s decision to replace Charney grew out of an ongoing investigation into alleged misconduct.

“We take no joy in this, but the board felt it was the right thing to do," Mayer said.

Interim CFO Luttrell said American Apparel would remain committed to its sweatshop-free, Made in USA manufacturing philosophy.

“We have one of the best known and most relevant brands in the world, with employees who are second to none; I believe we have a very exciting future," said Luttrell. "Our core business — designing, manufacturing, and selling American-made branded apparel — is strong and continues to demonstrate great potential for growth, both in the U.S. and abroad. This new chapter in the American Apparel story will be the most exciting one yet."

Charney founded American Apparel in 1998, building a company that became known for its racy advertising and unorthodox business practices. He himself also developed an unorthodox reputation, and was reported to conduct interviews and company meetings in his underwear.

The Los Angeles Times quoted an unnamed source who said Charney was “totally taken by surprise, which is part of the problem,” adding that he will “fight like hell to get this company back, but he won’t succeed.”

American Apparel has struggled in recent years amid sluggish sales and manufacturing and financing problems. It reported a net loss of $37.3 million loss in 2012, and a net loss of $106.3 million in 2013. It was recently in danger of being delisted by the New York Stock Exchange.

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REAL ESTATE

DreamWorks to launch high-tech Santa experience in shopping malls

BY Marianne Wilson

New York — DreamWorks Animation is looking to bring a little bit of Hollywood magic to the nation’s shopping malls. The film studio has developed a high-tech Santa Claus experience, billed as "DreamHouse," that it hopes to roll out to malls for the holidays, with two developers, Forest City and General Growth Properties already buying in, the New York Times reported.

According to the report, Santa Claus will sit inside inside a 2,000-sq.-ft. cottage-like space whose walls are made up of giant video screens. Kids will go on a virtual sleigh ride with Shrek before meeting with Santa.

"It’s an amazing, beautiful, big theatrical statement that represents our efforts to diversify into new areas," DreamWorks Animation CEO Jeffrey Katzenberg told the Times.

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News

Amazon enters the smartphone ring

BY CSA STAFF

Amazon has thrown its hat into the smartphone ring. At an event in its hometown of Seattle, the online retailer unveiled Fire, the first smartphone it has ever designed.

In a marketplace that’s already crowded with the latest iPhones, Andriods and Blackberrys, Amazon has invested in two new technologies — Dynamic Perspective and Firefly — that make Fire a compelling product that won’t get lost in the mix.

Dynamic Perspective uses four ultra-low power specialized cameras and four infrared LEDs built into the smartphone’s front face, a dedicated custom processor, sophisticated real-time computer vision algorithms, and a new high-performing and power-efficient graphics rendering engine. Customers will be able to read a long web page or a book without ever having to touch the screen thanks to auto-scroll. Tilt in Amazon Music shows song lyrics. Swivel instantly reveals quick actions. Peek in Maps shows layered information such as Yelp ratings and reviews.

Firefly combines Amazon’s deep catalog of physical and digital content with multiple image, text and audio recognition technologies to quickly identify web and email addresses, phone numbers, QR and bar codes, plus more than 100 million items, including movies, TV episodes, songs and products.

“Fire Phone puts everything you love about Amazon in the palm of your hand—instant access to Amazon’s vast content ecosystem and exclusive features like the Mayday button, ASAP, Second Screen, X-Ray, free unlimited photo storage, and more,” said Jeff Bezos, Amazon founder and CEO. “The Firefly button lets you identify printed web and email addresses, phone numbers, QR and bar codes, artwork, and over 100 million items, including songs, movies, TV shows, and products — and take action in seconds. We invented a new sensor system called Dynamic Perspective that recognizes where a user’s head is relative to the device — we use it to offer customers a more immersive experience, one-handed navigation, and gestures that actually work. And this is only the beginning — the most powerful inventions are the ones that empower others to unleash their creativity — that’s why today we are launching the Dynamic Perspective SDK and the Firefly SDK — we can’t wait to see how developers surprise us.”

Amazon is also offering additional incentives to consumers who pre-order starting today the 4.7-inch, Android-based smartphone with a high-definition display, a quad-core 2.2 GHz processor, and a 13-megapixel camera. For a limited time, consumers who buy Fire will get 12 months of Amazon Prime free. Existing Prime members who purchase the smartphone will get an additional 12 months added to their account free.

The smartphone ships July 25 and is available exclusively on AT&T’s 4G LTE network. Fire with 32GB is available for $199 with a two-year contract — an extra 16GB of memory for the same price as many other premium smartphones, Amazon pointed out — or zero money down for as little as $27.09 a month from AT&T on Next 18. Fire is also available with 64GB for $299 with a two-year contract or starting at $31.25/month from AT&T on Next 18.

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