CEO is leaving L.A. apparel firm

Paula Schneider, the chief executive tasked with turning around American Apparel Inc.’s flagging business, is leaving, two sources close to the company said.

Chelsea Grayson, the company’s general counsel and chief administrative officer, will take the reins as CEO on Oct. 3 — opening yet another chapter for the Los Angeles clothier that has been wracked by turmoil in recent years.

American Apparel also recently saw the departure of Chairman Paul Charron, a former CEO of Liz Claiborne who had joined the board in March. He was succeeded by fellow board member Brad Scher, founder of consulting firm Ocean Ridge Capital Advisors.

Schneider’s exit comes as American Apparel is looking for possible buyers, said the two sources, one of whom was not authorized to comment and the other of whom did not want to publicly discuss a sensitive matter. The company has hired Houlihan Lokey, a Los Angeles investment firm, to explore a possible sale.

Schneider, a longtime retail executive, was brought on in January 2015 after American Apparel’s board ousted founder Dov Charney as chairman and CEO. She intended to bring order to a firm saddled with debt and losing money. Over her tenure, American Apparel filed for bankruptcy protection and was taken private.

A source close to the firm said Schneider is leaving for personal reasons. But in her resignation letter to the board, obtained by Women’s Wear Daily, Schneider said selling the company may hamper its turnaround efforts.

“The sale process currently underway for all or part of the company may not enable us to pursue the course of action necessary for the plan to succeed nor allow the brand to stay true to its ideals,” Schneider’s letter said. “Therefore ... I’ve come to the conclusion it is time for me to resign as CEO.”