Dov Charney, Like It or Not

Bad Dog Hed Kayce, Charney's constant
companion, has had a problem. American
Apparel stores are precise, but not fuzzy.
Charney is fussy, especially about the
women who work the floor.

Strolling up the Bowery, Charney checks out every woman who walks by. Spotting a beguiling, bosomy girl in a tight American Apparel T-shirt, he smirks. "See--I'm keeping America beautiful!" In rare moments of weakness, he appears to be sensitive to some of the jabs he's taken in the media, but he is unashamed of his ongoing pursuit of models and, importantly, salespeople. He's recently come to the realization that one reason his stores--which, it should be noted, break their own records regularly--are not as successful as he'd like is that the makeup of the floor staff is just a bit off. "Our cast isn't quite right yet," he explains. "You know how Ian Schrager hires his staff at the hotels? He uses a casting company. Because that's what it is--casting! You can't have all Mary Anns on Gilligan's Island--you need Ginger!"

The makeup of AA's staff is a mad science that is hard to teach--or even explain. Right now, Charney feels there's no one here he can trust to do it, and so he's interviewing staff himself--hundreds of prospective workers a week. "I made a mistake with these stores," he says. "I didn't do it myself and it's wrong. So I've had to let people go and there's nothing I hate more than having to get rid of kids. It breaks their hearts. But you know what? It affects sales. Should garment workers at my factory suffer because we f-- up the casting?

"What I'm looking for is style--that's not something you can teach a person. You have it or you don't. Let's say one girl has an acne problem but good style, while another one is beautiful but has no style. I'm picking acne!"

The nexus of Dov Charney's T-shirt revolution is a trio of monolithic pink buildings just off Alameda Boulevard, in an industrial section of downtown Los Angeles that would cause your average tourist to roll up the windows and lock the doors. Over seven floors of the main building, Marty Bailey, Charney's VP of operations, monitors a frantic but efficient vertically integrated production that starts with massive rolls of fabric and ends with finished garments in the course of a few hours. Arriving on the scene in 2002, Bailey found a small company that didn't know how to be big. Sales were booming and Charney--who has a 50% partner (whom he declines to discuss at length) but manages American Apparel exactly as he sees fit--was running out of fingers to stick into a dike on the verge of collapse.

Charney admits he was in trouble. "I called up a guy I trust and asked, 'Who's the best out there at organizing a factory?' He said Marty. So I called him on a Saturday and said, 'Dude, my name's Dov and I need help.' He started Monday; that's the way I operate."

Bailey turned the American Apparel factory into the finely tuned machine it is today: 2,000 workers churning out a million garments a week, flexible enough to turn a late-night sketch into an actual garment for sale in stores within five days. How? Most prominently, Bailey organized the sewers into teams that can be adapted to create any of the garments in AA's line. They are self-policing and are paid based on their speed of production--hourly wages never dip below $8 and can go as high as $18 during particularly fecund periods. Within months, the factory went from 30,000 garments a day to 90,000. Where once there were 1,000 SKUs, today there are 10,000. "I don't think you'll find another shop in the world that does 10,000 SKUs on one floor," Bailey says.

Charney's designers will sketch on a napkin and fax it to L.A. "If we decide to have a new design in stores by the weekend, I can be shipping by Friday," says the VP of operations.

"I think if you're going to be a successful manufacturer in the U.S. you have to have quality, which we do, a focused market, which we do, and you have to turn product quickly--which we do," Bailey continues. "If we decide to have an entirely new design in stores by the weekend"--and Charney's roving designers have been known to sketch on a napkin and fax the drawing to Bailey--"if I have fabric in-house, I can be shipping by Friday."

Walking past his teams of sewers, most of them Mexican and nearly all wearing masks to avoid the inhalation of tiny cotton fibers, Bailey says that he can do $400 million in sales and 200 stores without expanding at all. He knows that Charney is a runaway freight train and that he has no choice but to hang on.

"Dov is the visionary and the passion. He's the motivator and sometimes he's the class clown." He smiles. "One thing I always say about Dov: I don't doubt him."

A few days after I return from L.A., I ring Charney to see what he's been up to. When I remind him that I've just come from the factory, he laughs. "I don't think it's my company anymore. I mean, as an entrepreneur, the macro--I have no idea how it's holding up." He means the operation, the buzzing, whirring, clattering, hitting-on-all-cylinders production that is churning out a million garments a week. You get the sense that he's in awe of this creature he begat, a T-shirt-pimping hustler who started a revolution by accident. "That's why I like working in the stores," he continues. "The micro I can handle."

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