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American Apparel Memorandum


To:   Board of Directors of American Apparel, Inc.

From: Michael Bigger, CEO of Bigger Capital, LLC, Cold Spring Harbor, NY  11724

Attn: Glenn A. Weinman, Executive Vice President, General Counsel and Secretary

747 Warehouse Street, Los Angeles, CA  90021

Distr:    Dov Charney, Alberto Chehebar, David Danziger, Robert Greene, Marvin Igelman, Allan Mayer, and William Mauer

As a significant holder of American Apparel shares, I want to take this opportunity to remind the Board of American Apparel of its fiduciary duty towards all the shareholders of American Apparel.

Given the recent setbacks experienced by the company as evidenced by the October 10 press release, Bigger Capital strongly opposes any action by the Board to extend the maturity of the Charney Anti-Dilution Provision as it did in 2013.

The current stock price represents an opportunity for Mr. Charney to make open market purchases with his own money in order to negate the dilution created by the funds that were raised in 2011, should he so desire.

Kind Regards,

Michael Bigger

CEO, Bigger Capital, LLC

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Reader Comments (7)

Mr bigger I am confused by your post. A previous Twitter post you say that you do not care or I think use the word I don't give a s*** what the American Apparel stock is valued for the next 5 years. However here in this letter you are referencing the current share price. I need to understand where you truly stand because what you are saying today contradicts your previous posts. I can understand if you are rattled by the share price but bravado filled messages like that you do not give a s*** about the stock price can come back to haunt you

October 10, 2013 | Unregistered Commenterrayray

I have an issue with these options and how they have been extended despite management poor performance. I do not care about the movement of the stock price on a day to day basis. I care about the performance of the company and when I buy stock I care about the difference between my assessment of value and the current price. Daily movement in the stock price? I don't give a sh*t when it comes to an investment position.

October 11, 2013 | Registered CommenterMichael Bigger

Here is the post about my shareholders meeting notes: http://biggercapital.squarespace.com/biggercapital-investment/2013/6/26/american-apparel-shareholders-meeting-notes.html

October 11, 2013 | Registered CommenterMichael Bigger

Couldn't agree more. Dov has chased away talent (Marty Staff, Tom Casey and others), turned away any leadership in the upper ranks who showed maturity and ability (Jordan Schiff, John Fontana) and is currently trying to run the entire C suite, in addition to marketing, supply chain, retail stores, ecommerce, HR, and IT. He deserves to be diluted until he figures out how to run a company like an adult.

October 11, 2013 | Unregistered CommenterJoe

Thank you Joe for your comments. That is really insightful. I did not know Marty had left. When did that happen?

October 12, 2013 | Registered CommenterMichael Bigger

Marty staff left in Oct 2011. Dov referred to him as one of the brightest in an la times article and claimed he had made substantial contributions. Couldn't hold onto him even 1 year.

The CFO is the only one left from the "turn around" team. He seems to be having issues curbing Dov's spending habits. Wondering if he tries anymore. Not blaming him. He needs board support to wrangle in a guy like Dov. Wondering where the board is while Dov is running crazy.

Manufacturing aside (Marty Baily, who is a legend), Dov has no one else in his C suite.
Where is the
What about his head of stores?
Head of Supply Chain?
Head of HR?
Head of Merchandising?

The answer.... Dov is all of these. Any wonder why the company is unable to sustain the momentum built by the now no longer present turn around team? Maybe Dov runs the board too.

October 12, 2013 | Unregistered CommenterJoe

Got it.

I got confused with Marty Bailey. John Luttrell is a great asset and yes, Dov is running the Board. I don't think anyone on this Board can stand up to him.

So let's see how they respond.

October 12, 2013 | Registered CommenterMichael Bigger

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