Dallas, Texas 07/24/2014 (FINANCIALSTRENDS) – American Apparel Inc (NYSEMKT:APP) after much of the public attention it attracted by firing CEO Dov Charney is now making all efforts to ensure tighter management by appointing new members to the current board.
Dov Charney who is founder of AAP also heads hedge fund Standard General. There were issues with respect to financing as well as board constitution which resulted in his ouster from this post.
The newly constituted board is expected to take effect by the first week of August, and most likely by August 2, as per regulatory requirement of 10-day wait.
The board will now see four new appointees as new directors who will now participate on proceedings along with the existing two co-chairpersons. Of the new appoints there was at least one appointee who is of significance here.
The election of Joseph Maganacca does definitely appear to be an interesting take on the scenario.
For Joseph Maganacca is currently head and Chief Executive Officer of another high-profile company which is not doing so well, RadioShack (NYSE:RSH). He has been heading the electronic retailing service since 2013.
However the issue before American Apparel Inc (NYSEMKT:APP) is to decide on the future of the fired CEO. There are talks to see if he will return to his old post or if a new incumbent will replace him.
However, the market for the retailer picked up with the announcement of the new board.
The two old members – Allan Mayer, David Danzinger – will continue as independent directors as well as Co-Chairman of the Board. Two new members were designated by Standard General – David Glazek , Thomas Sullivan.
While Magnacca as well as Colleen Brown, the only woman member were mutually appointed members.
American Apparel Inc (NYSEMKT:APP) at the close of trading day on Wednesday, was found to have closed at Tuesday’s prices of $1.09 but posted robust gains of 5.5% due to increase in trade.