Liberal billionaire George Soros is in talks to bail out the controversial retailer American Apparel, despite numerous accusations of sexual impropriety against the company’s CEO.
Crystal Financial, a Boston-based firm backed by Soros’ hedge fund, is considering offering American Apparel (AA) an $80 million credit line, the New York Post reported Sunday. Sources told the Post that American Apparel CEO Dov Charney missed internal targets for 2011 profitability and that his company has been "bleeding cash" since the start of the year. However, shares of AA stock shot up 13 percent Tuesday following the news of Soros’ potential investment.
American Apparel screens potential employees by the attractiveness of their photos before any hiring occurs. It was reported in June 2010 that "the applicant’s resume is a distant second when it comes to hiring decisions" at American Apparel, and the company does not deny that photographic review is required of job applicants. Its website instructs applicants to "submit a photo of yourself (pref. head-to-toe)."
Charney has also come under fire for advocating sexual activity to minors. In August 2011, legal experts raised the possibility that Charney might be sued for featuring a T-shirt with the slogan "Teenagers Do It Better" in his merchandise catalog. He collaborated on the T-shirt with Electric Youth Magateen, a publication that celebrates "the magnificent vitality, energy, and power of young male adulthood."
During previous financial difficulties, American Apparel tried to resurrect its brand by advertising on porn blogs with almost-nude actresses in the banner ads.
The Advertising Standards Authority in the UK banned an American Apparel ad that ran in Vice Magazine UK. The ad depicted a possibly underage model with partially exposed breasts. American Apparel claimed that the model in question was 23 years old.
In 2011, Charney was sued for $260 million by ex-employee Irene Morales, who claimed that Charney held her "prisoner" in his Manhattan apartment for several hours in 2008 when she was 18 years old. Morales claimed that she was forced by Charney to perform sexual acts against her will for a period of several months.
According to writer Claudine Ko, Charney and a female employee engaged in sexual activity in front of her while Ko was working on a feature profile of Charney for Jane magazine in 2004. Charney also masturbated in front of Ko during the interview.
Three employees filed sexual harassment lawsuits against Charney in 2005. Additional charges were filed in 2008 amid allegations that Charney wrongfully fired employees and conducted meetings in the nude. Charney denied the allegations, which were never proven in court.
In February, Soros denied his 28-year-old actress ex-girlfriend Adriana Ferreyr’s claims that he choked her and threw a lamp at her during an argument regarding property.
Human Rights Watch, which received $100 million from Soros’ Open Society Foundations in 2010, declined to comment on the billionaire’s support for American Apparel. Among other causes, Human Rights Watch advocates for women’s rights and speaks out against sexual assault and domestic violence against women.