NEW YORK (TheStreet) -- American Apparel (APP), the fashion retailer known for its "Made in USA" basics apparel that fired its founder and CEO Dov Charney last week, announced on Monday that it has hired Peter J. Solomon Company to represent it.
"We believe the hiring of a financial and strategic adviser at this important juncture is in the best interest of our stockholders and will help maximize long-term shareholder value," said John Luttrell, American Apparel's interim chief executive and its CFO, said in a press release. "Although the company currently is on track to meet its previously disclosed 2014 EBITDA, we are pleased to be working with Peter J. Solomon to ensure that we have adequate access to capital in the future at a reasonable cost."
The Los Angeles-based manufacturer and retailer surprised Wall Street on Wednesday evening when its board of directors put out a press release saying they had voted to replace Charney, 45, and notified him of their intent to terminate his employment. Co-chairman Allan Mayer cited "an ongoing investigation into alleged misconduct" as the reason.
Charney, who is the company's largest shareholder owning roughly 27% of its stock, is reportedly demanding that he be reinstated as CEO. His lawyer, Patricia Patricia Glaser, of Glaser Weil Fink Jacobs Howard Avchen & Shapiro sent a letter to the board, according to The Wall Street Journal. The board told Reuters that is has no plans to meet with Charney.
Peter J. Solomon Company is a 25-year-old investment banking advisory firm that concentrates on mergers, acquisitions, divestitures, recapitalizations, restructurings and fairness opinions, according to Monday's release. The firm's retail industry clients include: Office Depot (ODP), in which it advised the office supplies company on the merger with OfficeMax last year; Under Armour (UA) in which it advised the company in the acquisition of digital fitness technology MapMyFitness; Jones Day in which it advised the company through sale to Sycamore Partners; and RadioShack (RSH), in which it advised the company last year on a secured debt offering, according to its Web site.
Shares of American Apparel, which fell below $1 in January, were rising 4.5% as to 72 cents on Monday.
--Written by Laurie Kulikowski in New York.