American Apparel has fired its founder Dov Charney amid sexual harassment lawsuits and financial trouble.
The company has removed Charney as chairman and intends to fire him as chief executive and president after a 30 day cur period.
Chief financial officer, John Luttrell, will act as interim chief executive during the search for a permanent chief executive. The retailer also appointed Allan Mayer and David Danziger as co-chairmen.
Mayer said the company “takes no joy in this, but the Board felt it was the right thing to do”.
He added: “Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead.”
The company said the management changes may have triggered a default under its credit agreements, adding that it would be in discussions with its lenders for a waiver of the default.
In February the company engaged restructuring advisers after it had racked up $240m (£141m) worth of debt and reportedly came close to breaching loan covenants.