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Dov Charney on Modern Day Sweat Shops: VICE Podcast 006

September 14, 2019

DOV CHARNEY: Because of this
international industrial tragedy, there is now an
opportunity to have a serious dialogue about what’s going on
and how apparel’s being made. Because the fast fashion,
it is costly. REIHAN SALAM: Hi, I’m
Reihan Salam and this is the Vice podcast. I’m joined today by Dov Charney,
founder and CEO of American Apparel, one of the
most innovative fashion retailers and brands in the
United States, and also a major domestic manufacturer
of apparel. Dov, thanks so much
for joining me. DOV CHARNEY: Thank you. REIHAN SALAM: Dov, you’ve been
in the clothing business for quite a long time. In fact, my understanding’s
that you started in it as a teenager. DOV CHARNEY: That’s correct. REIHAN SALAM: So what
brought you into it? What was so compelling
about t-shirts? DOV CHARNEY: Well, I had a love
for basic white t-shirts, Hanes underwear t-shirts. And they were cotton. The t-shirts available in
Canada were poly cotton. I started to bring in
a few at a time. And I brought them so my friends
could resell them in front of the Montreal
Forum because they were bootleg t-shirts. I was wholesaling the shirts. REIHAN SALAM: So you were a
high school student in the United States and you were just
sort of buying them up. DOV CHARNEY: I was buying
50, 100 at a time. Reselling them to my friends,
smuggling them into Canada, and trying to make
a dollar a piece. And then I also worked with my
friends to sell them, so I was an employee of two
of my friends. As a street vendor we’d
get $50 each and we would sell the t-shirts. REIHAN SALAM: How old were you
when you started doing this? DOV CHARNEY: Oh, I think
it was 15 when we were doing that. Yeah. REIHAN SALAM: Wait, so how
were you getting back and forth across the border? Did you have an older friend
who was driving you? DOV CHARNEY: Amtrak. You could go. There used to be two trains a
day that would leave New York. Now there’s only one. There was the night train and
there was the day train. REIHAN SALAM: So, I mean, how
were you getting your studies done while you were
doing this? DOV CHARNEY: You know,
I mean, studies was secondary to business. Basically I was importing the
t-shirts, reselling them, and then a few other people said,
hey, can you get me some? And the business snowballed. It was a wholesale
t-shirt business. There was a printer by the
name of Bernie May on the corner of Saint Lawrence and
Sherbrooke in Montreal. He was a Harley Davidson dealer
and he said, hey, can you get me 1,000 of those? And then another guy said,
can you get me 5,000? And all of the sudden I had a
business where I was doing maybe $100,000 a year. There was a time that American
Apparel did. I remember it was, first year
was $12,000, the next year it was $100,000. Eventually, we had
a $100,000 month. REIHAN SALAM: OK, so you were
doing this as a high schooler. You’re making major amounts of
money as a high schooler. DOV CHARNEY: Well, I
wouldn’t say that. REIHAN SALAM: Well, because you
were spending a lot too, I guess, in the course
of doing it. DOV CHARNEY: Well, you
know, my books and records weren’t the best. I think I was losing money
when I thought I was making it. Every year or two there was a
shoe box of receipts and try and toss it out the window
on the highway. Start again. I was trying to make money. Still am. REIHAN SALAM: Well, fortunately
it’s not shoe boxes anymore, I hope. DOV CHARNEY: No. REIHAN SALAM: So then
what happened next? So then after high school did
you take some time out or in college were you
still selling? Were you still in the
clothing business? DOV CHARNEY: This has been
a continuous stream of consciousness for me since
I was 15 or 16 years old, every day. REIHAN SALAM: So one thing just
naturally progressed from the other thing? DOV CHARNEY: Yeah. I believed in American
iconic t-shirts. And I was buying Job Lots of
Hanes t-shirts in South Carolina, Columbia,
South Carolina. I took the train there
from Miami. And I met this guy named
Klaus Wustrow. And he was a German textile
engineer that had come to the United States as an engineer. Really knew what he was doing. He told we could make
our own t-shirts. Here’s how you do it. And then we took it
to a knitter. We had it knitted up. And then we took it to a fabric
finisher to get it bleached and finished. And then we took it
to a place called Ninety Six South Carolina. And we went over there and there
was maybe 15 women, and they sewed up the shirts in
front of me, and it took a couple of days. I remember the hotels I was
staying in at the time were like $20 a night. Gas was maybe $0.75 a gallon. REIHAN SALAM: That’s wild. DOV CHARNEY: Yeah, it
was another time. Anyway, but in South Carolina
in 1980 it felt like 1960. You know? REIHAN SALAM: Even then the
domestic garment manufacturing textile sector was already
going through a big transition, right? DOV CHARNEY: In the early ’90s
it was just starting. So I witnessed the collapse
of the apparel and textile industry in North and
South Carolina. REIHAN SALAM: And it was still
pretty protected back then. DOV CHARNEY: Yeah. It took about till 1995 and 1996
before it was decimated. But during some sales visits to
Los Angeles, because of the companies like Forever 21– the Carolinas was being
fueled by Hanes, Fruit of the Loom, Gilded. REIHAN SALAM: Just the
commodity purchasers. DOV CHARNEY: Right, the
commodity t-shirts. But then in California where I
was selling the garments, it became apparent that there was
manufacturing going on there. But that manufacturing was
more for boutiques like Forever 21. REIHAN SALAM: And that was the
really old school proto version of fast fashion. They’re very trend driven and
they’re doing little things. DOV CHARNEY: That’s right. They were much more flexible
than the South Carolina guys. T-shirts in South Carolina
were like $0.60. And when I came to LA They
were telling me $2.00. Everything was $2.00. But then I eventually showed
hey, I’m doing this in South Carolina and the wages are the
same and I’m paying $0.60. And I met a guy that said, OK,
give me 10,000 pieces. I’ll try and do it at the
prevailing prices, or more or less at the prevailing
prices you’re paying in South Carolina. And that guy eventually
became my partner. And I started manufacturing in
Los Angeles in the way that one would manufacture
in South Carolina. So I was one of the– REIHAN SALAM: The scale. The scale was a lot bigger. DOV CHARNEY: Right. But the cutting equipment in the
Carolina’s was different than the cutting equipment
that was being used in Los Angeles. The way they processed the
textiles was different, and I showed people, look. This is how I’m doing
it in Carolina’s. You want to do it for
me, do it like this. I had a $10 million business
so I was a big enough of a player to show people how
I wanted to do it. And still today, there are many
companies that adopted the manufacturing techniques
that I brought with me from South Carolina. So I kind of infected some of
the manufacturing tactics. REIHAN SALAM: When you first
got out to LA when you were first setting up this factory,
were a lot of your early employees– I mean, where were
they coming from? How did you recruit
these guys? Were they people who have
already been seamstresses in the area, that kind of thing? How did you find
the employees? DOV CHARNEY: At first
I was using subcontractors in South Carolina. I continued to do the same thing
where I would basically buy the yarn, commission knit
it, commission dye it, and contract cut and sell it. OK, so I was vertically
integrated subcontractor. We were under the 10 Freeway
on the Santa Fe exit. And some of those workers from
that factory, from that first 60, work with us today. REIHAN SALAM: That’s amazing. DOV CHARNEY: Right. We’re thousands of people, but
there’s some people you can see, they remind me,
I was with you when we were over there. They know. And I know. But no one else understands that
we were under the freeway with one toilet and you’d hear
the trucks on there, brr. It was crazy. It really felt like you
were on a journey. The reason I started bringing
manufacturing to Los Angeles was a lot of, the government was
actually padlocking a lot of the small contractors that
were left over because there was this effort to collect
every tax dollar. And some of them were falling
behind on their federal taxes because things were getting
very competitive. Because they were losing a lot
of contracts to Mexico and to the Caribbean, and, eventually,
to China. So they were struggling along
and the government just kicked them in the teeth. And they used to padlock the
factory, which was a big fear for me because I have all
my merchandise in there. So one day on a Friday night,
because there’s a company called Cross Country Transport,
right, if you can get to Charlotte by 11:50, we
can get your goods into LA by Monday morning. OK? So we’d take our own vans there,
load up the trucks and then a caravan of eight or
10 trucks would go in. Boom! They’d go down to Los Angeles. And the company that we’re using
in South Carolina got padlocked or couldn’t do it
or something went wrong. I think they got padlocked. I said, put the fabric
on that truck. And I said, Kevin, get over
there, get it up there. Lo and behold, no one knew how
to cut this fabric because it was flat-folded, and in
LA they use rolls. REIHAN SALAM: Wow, so was it
really a by the seat of your pants kind of thing? You were like, I just need to
get this out of there because it’s falling apart. DOV CHARNEY: And
I was in panic. I was in panic because I
couldn’t find a contractor. There was only one guy
that really knew how to work with flat. He had an old machine
to do it. He had a flatfold spreader. And it was my partner,
the guy that eventually became my partner. Because I had to get
this order out because of the deadline. REIHAN SALAM: So when did
it start being kind of a contrarian move for you to want
to keep your production in the United States,
in Los Angeles? Like around what year did you
start seeing that the other folks who were doing the same
thing, they started falling away, and that you were the– DOV CHARNEY: The mid ’90s. Because at that time everybody’s
rolling to Mexico. We’re going to make the fabric
here, we’re going to cut it over there, we’re going
to bring it back, it was like that. I am a little bit of
a control freak. I want it a certain quality. What made American Apparel
happen was our t-shirts were a little bit better than
the standard stuff. I mean even though
I was double the price, I was like OK. And it was through being a
little bit ahead and having a little bit of taste, a little
bit of foresight. Because I had what they want,
I could charge more. And when it comes to t-shirts,
OK, so the Hanes t-shirt is two bucks and the American
Apparel t-shirt was $3.50 but for $1.50 difference, if I’m at
a concert, if I sell 100 of these and 10 of these, well
this is cheaper because my revenue’s so much better on the
American Apparel product. So that’s how we did it, by
exploiting art, basically. REIHAN SALAM: So it began
by being, look. This is how I make my money. I make my money by offering
a better product. I’d better be sure it’s
a better product. I want the control. And that’s why I want to be
where it’s being manufactured. DOV CHARNEY: Precisely. People weren’t that interested
in made in USA. I mean there was some interest
in it, but it wasn’t that interesting because there were
some people that were of the ilk that, it doesn’t matter
where it’s made, I want the best value. Caveat emptor. I want good price for
the customer. But I think I provided
that first. It was a good deal. Like, yeah, it’s more expensive
but it’s better and here’s why. REIHAN SALAM: But you know now
one of the things you’re thinking about and you’ve been
talking about is just about these larger issues, these
larger issues surrounding the economics of the business
and what have you. And also you said
before you’re an adamant ardent free trader. You’re not looking to throw
up tariff barriers or anything like that. You seem totally comfortable
with the idea of other countries manufacturing garments
and what have you. So am I right in saying
that what you’re saying is that, look. It’s fine to do it elsewhere. It happens to be better
to do it here. Is that kind of what you’re– DOV CHARNEY: Well it’s not
about here or there, OK? What’s important is that I
believe in bringing the worker into the company. That’s the first thing. OK? Knowing the face
of the worker. We’re not relentlessly pursuing
cheap wages in order to get the product made. OK? And that’s interesting. That’s interesting. But we’re still relentlessly
pursuing everything else to make sure we’re offering
the customer value. Because I don’t think we’re
going to guilt trip the customer into buying
our product. REIHAN SALAM: So basically
you’re not saying that made the USA is going to make someone
pay $2.00 to $3.00 more for a t-shirt. You’re saying that for you as
a company, the higher wages, that actually disciplines you
and that actually makes you a better company in
other regards? DOV CHARNEY: Well, it’s like
an art project where you’re told, OK, you can’t– you know, sometimes you’re given
a piece of charcoal and you have to design a colorful
landscape with a black piece of charcoal. But it’s possible to give
people that feeling. If we’re going to sell clothes,
we’ve got to give them a reason to want to buy. We have to play up to it’s
of good quality. It’s going to make
you feel good. It’s well draped. It’s well cut. It’s a good product. It’s going to last a
little bit longer. So we have to play up
to the mystique. REIHAN SALAM: This is one
thing I wanted to actually ask you about. This is one thing that
I find fascinating. So when you look 30 years ago
to today, if you want a college education it costs
far more, like five or six times more. If you want to stay a night in
a hospital it costs five or six times more. Clothing is much,
much cheaper. And it’s enabled a revolution
in self-expression. You think about someone
growing up in 1980. Maybe you had a pair of corduroy
pants, you had a pair of jeans, you had kind
of a few shirts, something like that. But now it’s an explosion. And it seems to have actually
changed the texture of our lives. But in a way when you think
about it, well, part of that’s manufacturing in Mexico. Part of that’s manufacturing
in China and Bangladesh and Vietnam and Cambodia. That’s enabled this
kind of freedom. DOV CHARNEY: Yeah, this
fast fashion is kind of crass and cheap. OK, number one, I’ll say that. Number two, it’s on the
backs of other people. I was having a discussion with
someone earlier today and I saw a bus go by with a guy and
a girl, it was an H&M ad. He looked very handsome and
she looked very lovely. And the bus was going by. But the problem is, the stuff,
it’s sexy, it looks sexy, it feels sexy, but it’s made
in a place, it’s basically stolen goods. Hot. They’re hot goods. When you buy a brand new TV
set and it’s stolen, it doesn’t feel quite right. It’s not right. REIHAN SALAM: But there’s
another issue here. So Bangladesh is a country
where, and this obviously has been the big controversy
because of the factory having collapsed. Over 1,000 people have died. It’s obviously a massive
human tragedy. On the other hand, when you look
at Bangladesh from the ’70s when the whole garment
manufacturing trade got started there to now, the level
of poverty has gone from 70% to 40%. You’ve got 3 and 1/2 million
people working in the garment manufacturing sector. Average incomes have gone from
about $1 to $5 a day. And a lot of that’s driven
by the garment manufacturing stuff. So I mean, I definitely
see what you mean. These are wages, these are labor
standards that we would obviously consider totally
unacceptable in the United States. On the other hand, when you
go to Cambodia, Vietnam, Bangladesh, these countries,
it does seem like the fact that we have fast fashion, we
have this stuff here, it does seem to have actually driven
some progress there too. DOV CHARNEY: Yeah, that’s
the upside. But the thing is, is that when
we come to grips with– I think a lot of people
don’t understand what sweatshops are. I’ve tried to explain
it to people. I’ve been in and out of
sweatshops all my life. There are sweatshops
in Los Angeles. I’m familiar with them. I can tell you. We can go look at them tomorrow
if you want to fly there tonight. And there are certainly
sweatshops in Mexico. I’ve been in them. I’ve been in and out of them. I’ve been in sweatshops
all over the world. But I’ll tell you one thing. That if it’s a sexy piece coming
out of a sweatshop, there’s a reputational risk, and
it just doesn’t feel good. You don’t want a sexy pair of
underwear or lingerie to be made in a slave-like setting. So that’s one of the downsides
over time of using sweatshops. But there’s also an economic
thing is that there’s not going to be cheap
labor forever. The world wages will harmonize
as we globalize the economy, as there’s a free flow of
money, as we eventually liberalize the movement
of people. OK? The invisible hand will create
a scenario whereby we may not have these cheaper wages
in Bangladesh. So in the long term what’s
really smart is to– REIHAN SALAM: That’s the
very, very, very long term, though, right? It’s funny because what
you’re saying partly– DOV CHARNEY: Do you think that
clothing will be made by hand in 100 years? REIHAN SALAM: No. DOV CHARNEY: Me neither. I mean, some of it will be. But there’s going
to be machines. A guy sent me a video
of an idea he had. He’s got money from the New
York Department of Energy. He has this machine where the
fabric rolls in this thing and it bonds the t-shirt. The t-shirt drops to the ground
and another machine puts it over here. It’s not going to be forever. Even though we pay workers
$30,000 a year– not all workers, but
many of them earn– experienced workers are into
wage levels like that. If you have two partners that
are living together, it’s a household income of $60,000. And they’re working and married,
probably $60,000 can get you to places
in Los Angeles. Get you a fair apartment, a
car, internet, et cetera. Right? We’re paying a fair wage, but
it’s still hard labor. I make a good wage. You could pay me my salary,
I wouldn’t sell t-shirts. It’s not a fun thing to do. OK, pay a fair wage, we’re
committed to that. And there’s a lot of smiles
at American Apparel and I love my workers. But it’s not something I think
that will be done for the next 100 years. OK? It’s sitting there
at a machine. The reason we haven’t automated
the apparel industry is because we always
have cheaper labor. So it doesn’t pay. There was a company called
Atlanta Attachment that used to come up with all these
automated devices. We still use their devices
at American Apparel. They’ve gotten out of the racket
because a lot of this automation– just go to Bangladesh. REIHAN SALAM: It is a
fascinating issue. You see it when people talk
about, for example, agricultural labor. To some degree, well, if the
wages were sufficiently high, we’d find machines to do it. But yeah, I mean to some extent
it is just a matter of, if you have cheap labor
available you’ll use it instead of more expensive
labor. But so it seems that on one
level you’re saying that, look, it’s actually a
reputational risk. It’s a brand risk issue. DOV CHARNEY: There’s
some of that. REIHAN SALAM: But so one
argument for higher wages is the Henry Ford argument,
right? The Henry Ford argument that to
some extent these are the folks who are buying the
products as well and we want to pay them higher wages. Also because they’re going
to be more efficient. They’re going to be
more productive. There is going to be less
turnover if we pay people higher wages. Is that– DOV CHARNEY: OK, that’s a
marble on my side, OK? The Henry Ford argument. Then the reputational one’s
a marble on my side. OK. REIHAN SALAM: Do you find that
that’s actually true? Do you find that by paying
a little bit more you get less turnover? DOV CHARNEY: Of course. Of course. You get the right people in, you
train them, you keep them, you retain them. They become really good
at making belts and t-shirts and shoes. REIHAN SALAM: So in your factory
if they’re working there for three, four, five, six
years, are they moving up the ladder? DOV CHARNEY: Yeah, I have a guy
that was with me when we had 200 workers and now
he runs the factory. His name is Jeremiah. And remember, he was on
the sewing machine. And now he runs around,
everybody’s chasing this guy. Jeremiah, can you
help me do this? But there is a ladder of opportunity in apparel industry. There’s a ladder of opportunity
in our building. 10 years ago, I used to say,
American Apparel supports an international minimum wage. I can provide that to you. 10 years ago. At times, we backed off the
sweatshop-free thing because we didn’t want to drown
people with it. Because we thought we had a
great enough product that it could stand on its own. I must say that one rarely
should say positive things about one’s own team, but we
really did build something important and different
in Los Angeles. And we deserve more credit
than we’ve gotten. The way we’re going to prove it
is to make this business as profitable as the very best
apparel companies that are paying almost nothing. REIHAN SALAM: Some people would
say, I mean this is a historical process. I mean if you were on the Lower
East Side in 1905, OK? I mean, you had a garment
manufacturing that was going on down there that did
not look pretty. But that was an essential
step. And then basically 20, 30 years
later you had those guys who were on the Lower East Side
moving out to Brooklyn and Queens, buying a single
family house, climbing the ladder, their kids
are accountants. DOV CHARNEY: Yeah, my Bubby
was a garment worker. She made $7.00. $7.00 a week. REIHAN SALAM: So then I guess
part of the argument is that, look, maybe what we’re seeing
in Cambodia, Vietnam, Bangladesh, these countries, is
they’re just at that stage in the historical process, and
we’ve got to let that happen. And that in a way by short
circuiting that process and by saying to Bubby in 1905, sorry,
this isn’t acceptable because we think that
this is slavery. DOV CHARNEY: It’s 1929. REIHAN SALAM: But that this is
unacceptable, we’re not going to let you do this. I mean in a way maybe you’re
short circuiting this process through which the Cambodias of
the world are slowly going to climb that ladder. You can’t have them
all do it at once. You’re going to have to have
the different wages and the different standards. Do you buy that argument? DOV CHARNEY: I buy that argument
to a degree, but I think that these corporations,
like H&M’s a $22 billion dollar corporation. They’ve amassed an enormous
amount of wealth. They don’t have to have their
hands dirty to the extent that they do. The number one thing that
these companies, I do privately with manufacturing
for other companies. I’ve done jobs for Levi’s. I’ve done jobs for JC Penney. I’ve done third party work. Let me tell you the biggest
problem in the apparel industry is that all the
contracts are short-term. That’s one of the things that
keep sweatshops, sweatshops, is they never can invest
in the equipment. They can’t make the long-term
investments. REIHAN SALAM: That’s exactly
what the Bangladeshi garment manufacturers are saying. They’re saying that you’re
giving us a hard time for this, but we have these tiny
margins, and we get massively punished if we don’t turn
something in on time. DOV CHARNEY: Let me tell
you what they’re doing. Because I’ve been a Bangladeshi
third party garment contractor
to a degree. Making garments for Levi’s, et
cetera, there’s a deadline. You miss that deadline? Take the goods. They’re yours. And if you sell them,
we’ll sue you. Especially, if they’re
printed with a swoosh you’re not going anywhere. OK? You sell that anywhere, we’re
going to take your children and they will be punished. OK? And we will not pay
you anything. OK? They were hustling everybody
back in the building because of deadlines. Now if these garment
manufacturers are serious, I’ll challenge them
to the following. Put a clause on all of their
purchase orders and their letters of credit– it’ll completely disable the
financial system, by the way, OK, because no one will
know what’s going on– that if there’s a human hardship
involved with this particular order of gloves or
this particular order of leggings or whatever, that if
you have to be late because of a human hardship, call up this
1-800 number from Bangladesh. 1-800 Bangladesh help, OK? And we’ll put you on the phone
with H&M and we’ll review the human circumstances
of the situation and get you an extension. All of the sudden the cost of
fast fashion is going up. Because you know what? The bathing suits didn’t
show up on May 15. They came in September 15
because there was a building that was about to collapse. So what are you doing to do? You’re stuck, you know
what I mean? H&M’s going to be stuck with all
these bathing suits that they’ll have to sell next year
or they’ll have to get rid of. REIHAN SALAM: So you now have
a coalition of retailers and it’s been a lot of the big
European retailers who have signed up. And the Americans have been
more reluctant to do so. But who were saying, OK. We’re going to agree to a code
on safety and building safety and fire safety, and they’re
saying that we’re going to spend up to half a million
dollars to upgrade these factories– DOV CHARNEY: Half a
million dollars? REIHAN SALAM: Well, that’s
what they’re claiming. DOV CHARNEY: It’s going
to require billions. Half a billion dollars
would’ve cost me to paint my factory. I don’t know where they’re
coming up with– half a million? REIHAN SALAM: Yeah, they’re
saying up to half a million dollars for upgrades for
different facilities. DOV CHARNEY: These clowns have
to give provisions for extensions. When you listen to some of the
media, some of the interviews, when there were labor disputes,
why do you think they’re going and shooting
people in the head if there’s labor stoppages? Because they’re going to get
stuck with the goods. You know what it is to get
stuck with the goods? I’ve been in that
circumstance. I’ve got to tell you. I’ve faced financial disaster
when I’ve had these cancellations. I had an order that
I was doing for Target many years ago. I was paralyzed. It almost crushed me. REIHAN SALAM: Is this the
responsibility of the consumers then? Should the consumers actually
be stepping up and saying that, you know what? I try to eat organic
local produce. I now want to be sure that my
clothing does not entail these kinds of draconian
requirements? Should it be done by
the consumers? DOV CHARNEY: The real people
that have to get the job done? It’s about the business leaders,
at my competitors. I call upon them to do
exactly what I said. If they do it, they’re men,
but they’re mice. See, I deliver to myself. So if I’m late, no
one notices. We realize, oh my God, we just
got the bathing suits in. Late deliveries, cost
overridance. We bear the brunt of that when
we just hurt ourselves. But they’ve put such strong
delivery dates on these suppliers that if these
suppliers are late, they’re going to get hung. They’re out of business. So if it’s a choice between
putting people in a dangerous building, back in the building,
or crushing a union versus going bankrupt, they’re
going towards crushing a union or taking some risks with
health and safety. REIHAN SALAM: But you don’t
think the consumers are the ones who have to drive
this change? DOV CHARNEY: Well, I think
that there can be now. Because of this international
industrial tragedy, there is now an opportunity to have a
serious dialogue about what’s going on and how apparel’s
being made. Because the fast fashion,
it is costly. When you see these buses rolling
by or these signs that say, bikini, $4.99. I’m telling you. I’m an expert in the
apparel industry. $4.99 doesn’t exist unless
you’re screwing someone. That’s it. OK? A $4.99 bikini? Wake up. OK? That’s like saying, hey, got
a hamburger for $0.10. I got it. It costs money to make things. REIHAN SALAM: Is there
some middle way? Here’s what I want
to throw out. So if you believe that
the fact that garment manufacturing is happening in
the developing world, this is something that is actually
a sign of human progress. It’s helping some of these
countries get ahead, it can alleviate poverty in
these societies. Is there some way to say,
OK, pay a little bit more for your t-shirt? DOV CHARNEY: Why doesn’t H&M
say, we’ll pay $100 a month. Not fair. We’ll pay $200 a month. What about $50 a week? Can H&M afford $50 a week? They shouldn’t be
making clothing. If they can’t pay $50 a week,
don’t make clothes. $50 a week. $10 a day. Five days a week. We’re going to make sure that
anybody making our clothes– H&M, what’s the minimum
wage in Stockholm? All right? Why don’t they give
the minimum wage? These guys, OK? Talk, talk, talk, talk,
talk in Stockholm about all this socialism. It’s about me, me, me, me, me. All the workers rights,
it’s all for Sweden. But we’ll import everything
else, right? It’s a form of apartheid. Many of these socialist
countries with very high wages, they secretly are
doing it on the backs– Why don’t they say, look,
whatever the hourly minimum wage is in Sweden, we’re going
to offer that as a daily minimum wage to the workers
in Bangladesh. Let’s see if they’re
willing to do that. REIHAN SALAM: Well, one issue is
that the productivity of an hourly worker in Sweden has got
to be so much higher than the productivity of
an hourly worker– DOV CHARNEY: Yeah, I’d like to
see a Swede make a t-shirt. OK? We’ll see. We’ll see. That’s not really acc– That’s a lot of talk, OK? We’re going to pay, $15.00– let’s go to the US
minimum wage. OK? We’re going to pay $8.00
an hour is the California minimum wage. We’ll pay $8.00 an hour
in Bangladesh. We’ve got a $22 billion dollar
company, we’ll lead the way. No. They won’t do it because they’re
paying $40.00 a month. They’re paying $10.00 a week. They’re paying $2.00 a day. $2.00, come on. REIHAN SALAM: I believe it was
$40 a month and now they’re going to raise it. DOV CHARNEY: What are they going
to raise it to, $46.00? I mean, it’s $2.00. It’s going to go to $3.00? What’s $3.00 a day? REIHAN SALAM: But the reason why
the hourly wage is a lot higher in the United States
is also because of, you have the capital. Right? You have the tools and
what have you. It’s not necessarily
because of– DOV CHARNEY: These
guys are making– Some of the richest men in
Europe are the men that own these companies, that have
founded these companies. This is not a guy like me. I’m willing, if you want, I’ll
put all of my bank statements on your show. You can put them up. Let’s see if the guy from H&M,
the founders of H&M or the people that are backing H&M are
willing to disclose what they’re earning, show their
tax returns, OK? Show what they’ve got tucked
away in their Swiss accounts. OK? These guys are making too much
bloody money to not be able to pay the minimum hourly wage as
a daily wage in Sweden and Bangladesh. REIHAN SALAM: If I’m H&M and I
make that move, OK, and if I decide that I’m going to pay the
higher wages then Inditex and Zara comes along and
says, well, we’re not going to do it, right? DOV CHARNEY: Well what happens
if they’re forced to do it? What happens if they’re left out
in the cold looking like they’re the ones with the
apartheid oranges? I mean eventually no one wanted
to buy Outspan oranges in London and Montreal
and Toronto. They didn’t have Outspan oranges
in the States, but we had citrus from South Africa. It was like no way. REIHAN SALAM: Because we just
decided that apartheid was just too ugly. DOV CHARNEY: And eventually
people would not eat Outspan oranges. My mother, when she saw my
grandmother had bought Outspan oranges eventually was
like, throw them out. REIHAN SALAM: OK, but
here’s the thing. OK, so the thing is
that if you’re imposing Swedish wages– DOV CHARNEY: I’m saying
only one. Take the hour for the day. REIHAN SALAM: No, no, no. Fair enough, fair enough. But if you have a big, big
increase in wages before Cambodia or Bangladesh gets to
that point where they’re sufficiently productive, then
that’s just going to mean you’re going to go from having
3.8 million garment workers to having a few hundred. DOV CHARNEY: What if there’s
a movement to set an international minimum wage
for clothing workers? That’s what we really need. I have a minimum wage. My minimum wage? OK, take a look at the
bear on the flag. California. They set the wages at
American Apparel. OK? Sacramento, thank
you very much. OK? That’s it. That was what my minimum
wage is. I live by them and I
still make money. OK? I have positive cash flow. We intend to make $47 to $52
million of EBITDA this year. We’ve put out a guidance. That’s our guidance. We’re going to generate about
$50 million in positive cash flow at American Apparel, OK? But we are paying the
wage by the bear. Why don’t they set a minimum
wage for themselves? They’re talking about
signing something? Sign something that has teeth. Real money. Not like we’re going
to fix the toilets. Are you going to make sure the
building doesn’t come down? I’m like, God, that’s
the only thing? Pay. Where’s the money? REIHAN SALAM: If you do kind of
raise that– let’s say you set this international
minimum wage– one concern then is that you’re
going have a situation in which the Indonesias, the
Chinas, are going to be winning out at the expense
of the Cambodias, and the Bangladeshs. DOV CHARNEY: Not really. China’s on the run. I am an employer in China. OK? Let me tell you what’s
going in China. The wages, they’re changing
every month. Every month you’ve got to
pay a little bit more. China’s on fire. REIHAN SALAM: But that’s
what I mean. What I mean is that you’re going
to have a situation in which you have the countries in
the developing world that are the most productive, they’re
going to be picking up the ladder, right, and then
leaving the countries that are not productive behind. DOV CHARNEY: I’m only saying,
let’s give them– what is it– I just called upon $2.00
dollars an hour? If they can’t pay $2.00 an hour,
$3.00 an hour, whatever it is, get the hell
out of business. You’re saying, oh well maybe
it may destabilize. If we didn’t have minimum wages
in the United States, wouldn’t have all of the
jobs ran to Detroit? There’s nothing wrong with a
little safety net, especially if it’s industry imposed by
themselves, by the very richest of companies. REIHAN SALAM: I think
the case for a safety net is very strong. But part of the issue is that
you see wages rise as productivity rises in
a society, right? And society is rising partly
because you have an accumulation. You have an accumulation of
human capital, you have an accumulation of infrastructure. DOV CHARNEY: If you say we’re
not going to work with factories that don’t pay at
least $2.00 to $3.00 an hour, you set a number. I don’t want to set
it on this show. But let’s call $2.00 as a start
and then you raise it incrementally, I don’t think
that will change the ebbs and flows of how everything happens
in this industry. I don’t think suddenly people
are going to be leaving Bangladesh and going
back to China. Don’t think so. Because the reason they’re in
Bangladesh isn’t just for the price, it’s for scale. OK? It’s for scale. That’s why Bangladesh
is now the second largest producer of clothes. And by the way, Bangladesh
has got it. I mean, I understand. Maybe they don’t get to
sub-Saharan Africa now. You know what I’m saying? But maybe sub-Saharan Africa
does something better anyway. REIHAN SALAM: I think
that that’s the thing that I have trouble. A lot of what you’re saying I
think makes a lot of sense. I think that my concern is– DOV CHARNEY: Do you
condone slavery? REIHAN SALAM: Absolutely not. DOV CHARNEY: OK, then you have
to support what I’m saying. I’m not telling it has
to be $50 an hour. I’m not saying it’s got
to be $7.00 an hour. I’m saying $2.00. They’re not even paying
these people– let’s see, they said
$40 a month, right? And how many hours
does a man work? 160, if they’re working
40 hours a week. But we think they’re
working more. REIHAN SALAM: That’s
$0.20 an hour. DOV CHARNEY: $0.20 an hour! $0.20 an hour is slavery. REIHAN SALAM: OK, in Bangladesh,
you’re talking about a country with 150
million people, OK? And you’re talking about people
who are going from subsistence agriculture. Right? DOV CHARNEY: Which may be higher
wages if you think about what– they might be going home
with a bushel of corn that’s worth more. REIHAN SALAM: They
don’t think so. They don’t think so. That’s why they’re going
to the cities. That’s why they’re streaming
into the cities. You see this happening
in Africa. You see this happening
all over the place. DOV CHARNEY: You know what? H&M could afford to
pay $2.00 an hour. And then so maybe they’re not
going to have, it’s not going to say $4.99. And maybe their EBITDA margins,
maybe their net profits, their shareholders are
going to start to show a little bit of strain. But you know, they can
advertise harder. They can design better. Let’s see if Forever 21– You take H&M, Forever 21,
Primark, you take all these discount retailers and
you say, hey, guys. Can you afford a $2.00
per hour wage? If you can’t– REIHAN SALAM: Dov,
let’s say, OK. I buy this, OK? So let’s say, just for
argument’s sake, that I’m a consumer in New York, LA,
Stockholm, whatever. And I believe that I’m
not comfortable with what H&M’s doing. So H&M, they have to pay
this higher wage. Then you’ve got some company, a
startup company in Cambodia. And the Cambodian company
says, OK. H&M isn’t going to exploit us. We Cambodians are going to
make our own clothes. We’re going to pay the local
prevailing wage. DOV CHARNEY: They won’t have
the seal, you know? The seal with the– It’ll be like a little
heart or something. You know what I mean? They don’t have that
little heart on the label though, you know? REIHAN SALAM: But would that be
OK with you, if that it’s not H&M, it’s not the
Swedes coming over and exploiting people? DOV CHARNEY: Yeah, but globally
is a startup out of Cambodia coming to sell clothing
in the United States doing their own retailing? REIHAN SALAM: Because at least
not the Swedes coming and exploiting the Cambodians, it’s
the Cambodians exploiting themselves. DOV CHARNEY: Let me tell you
what’s going on in retail. New York City is a
shopping mall. Independent retail’s being
set aside, OK? Each lease is controlled. Chipotle next door. We have a Duane Reade. And then beside over here we’re
thinking you, American Apparel, could come
in over here. You have an H&M over here. Come on. It’s being colonized, OK, by
these massive multibillion dollar companies. That they can’t afford to pay
$2.00 an hour, shame on them. That’s the thing. REIHAN SALAM: But if you have a Cambodian company in Cambodia– DOV CHARNEY: Talking about
for assembly only. I’m not even talking
about textiles, OK? I’m just talking about
the assembly of the apparel product. REIHAN SALAM: But you get
where I’m coming from. So forget about the Swedes
exploiting Cambodians. The Cambodians deciding
this is the wage we can afford to pay. We’re going to try
to make it big. We’re going to try to
sell and stuff. Because you said yourself,
you’re not a big fan of borders, right? DOV CHARNEY: I think
they can handle it. REIHAN SALAM: You think
they can handle it? DOV CHARNEY: Yeah because the
amount of money that they have, they control
the real estate. OK? It’s not easy to just waltz in
and open all these stores. They control the supply chain,
they control the distribution centers, they control the
shipping companies, OK? I know what I control. Like JetBlue airways, OK? The air freight from
LA to New York? I control that lane
as best I can, OK? No one’s muscling
in on my spot. I’ve got to get the stuff out
of Los Angeles into the streets of New York
seven days a week. If there’s a disruption to
that delivery flow, I’m ballistic at 9:30 in
the morning, OK? H&M controls various aspects of
the apparel industry, OK? REIHAN SALAM: The way that I
think about globalization sometimes is this. You have a world in which some
countries exist in the year 2013, and you’ve got some
countries that are in 1920, some that are in 1950, some
that are in 1800. DOV CHARNEY: And some
that are in 2020. REIHAN SALAM: Right. Exactly. Exactly. And the thing is that when you
have these countries that are in 1850, to say to them, we want
you to operate according to 1975 rules in the United
States, they’re not going to be able to do it. They’re not going to
be able to hack it. They’re not going to be able
to actually enter and take advantage of this
global economy. DOV CHARNEY: You cannot allow
for slave wages to be paid in the apparel industry. It’s not acceptable. It can’t be sustained. You’re saying, well,
slavery’s OK. REIHAN SALAM: But that’s
not what I’m saying. DOV CHARNEY: Eventually the
world said, no apartheid. Not going to happen. They’ve got to say,
no wages that are below a certain level. That’s it. If you’re going to play the
manufacturing game, you’ve got to pay even $1 an hour. $1 an
hour, that’s four times. REIHAN SALAM: OK, but Dov. You’re talking about safety nets
and that’s fair enough. OK, but here’s the thing. If you’re going to do that, but
then you don’t also have global redistribution, OK– DOV CHARNEY: This is global
redistribution. REIHAN SALAM: But if you’re
pricing folks out of being on the bottom rungs of the
economic ladder. Sub-Saharan Africa, these
countries that aren’t even there yet. They’re not even where Cambodia
is yet, they’re not even where Vietnam is yet. And if you’re saying that,
look, it’s slave labor. We’re not going to
let you do it. But then to them, I’m in
the Kalihari desert. OK, otherwise I’m wandering
around– DOV CHARNEY: Hey, but you
don’t let me do it. I mean, I can’t hire you. If I want to pay you $6.50
an hour, which is what you’re worth– REIHAN SALAM: But you’re not
going to do it for fun. DOV CHARNEY: No, but
you’re not going to take the job at $6.50. No, you will take the job. Do you know how many young
people would say, sure, I’ll be your assistant for
$7.00 an hour. I want to be Dov Charney’s
assistant for $7.00 an hour. But I can’t hire you
at $7.00 an hour. I’ve got to pay you $8.00. You’re a California worker. I can’t label you
as an intern. They said in California,
no more interns. You heard about this thing? An internship has
to be for real credit, for school credit. You can’t just call
them an intern. It’s a labor violation. According to Sacramento, you’re
not allowed to do it. OK? So you say, I just want
to be your intern. You don’t have to pay me. Sorry. You can’t work as my intern. REIHAN SALAM: It took hundreds
of years for California to get to that place. DOV CHARNEY: I’m just saying,
there’s certain minimum standards we have, and
you know what? There’s more billionaires in
California than anywhere else. OK? REIHAN SALAM: Didn’t
happen overnight. They didn’t get from the
Kalahari desert. They didn’t get from Senegal
to California. DOV CHARNEY: California’s a
leader in terms of wage and hour laws, OK? You have the eight hour
workday in California. You have so many employee
favored laws there. Yet California is prosperous. REIHAN SALAM: Well,
not everyone would agree with you there. They’re bleeding talent. DOV CHARNEY: Ask them at
Google or Yahoo or all these big comp– Go over to Palo Alto and
drive through town. REIHAN SALAM: But like every
single employee of Apple is generating hundreds of thousands
of dollars of revenue, right? Every employee who’s working
that factory at Rana Plaza in Bangladesh, they are not
generating over half a million dollars in revenue, OK? DOV CHARNEY: Actually
they are. They’re generating
a lot of rev– It’s going to the malls. Look. What’s happening in my industry,
because I have to compete to hire all these
people, the administrative employees in the apparel
industry are making six figure salaries and beyond, OK? The malls, OK? Right now there’s a big thing
going on in Las Vegas. It’s the mall. I think it’s called the ICSC. It’s when all the mall owners,
or they’re taking out one of my guys to dinner right now. Let’s go to Morton’s, OK? Everybody’s fat and happy. Or everybody’s fat and
happy in retail. And in the real estate industry
that’s supporting the retail industry, all the agents
are happy, everybody’s feeling great. By the way they had a nice
little whorehouse, I heard, in the building, OK? Where they were doing drugs,
cocaine, all kinds of things they talked about was going on
on the ground floor below where all the workers were. So it’s a little bit insane to
think that we can’t say look, we’ve had a disaster here. OK. What would they have
to pay, OK? What would they have to pay if
this disaster took place in the United States? How many billion dollars would
they have to pay out? A building. Imagine the American Apparel
building falls down, OK? What am I going to
have to pay? What is going to be
left over for me? OK? I mean, come on. The least they could do is start
to set minimum, we’re not going to buy any apparel in
Bangladesh unless they’re paying so much money. We’re going to put a clause in
every purchase order that allows that if there is a human
hardship involved and I was executing this order, we
want a hearing before an H&M advisory board to see if we
can get an extension or an industry sponsored
advisor to do it. REIHAN SALAM: It’s also
true that you’re a successful guy, OK? You’ve done a lot of things,
you’ve built a substantial enduring business, OK? So if you’re going to take out
an insurance policy on your life, you’re going to be able to
take out a much bigger one than a guy who has led a
lackadaisical life, hasn’t amounted to much. In that crude sense that neither
of us is comfortable with, there is a crude sense– I don’t like it, you don’t like
it– but there’s a crude sense in which your life is
quote, unquote, “worth more.” DOV CHARNEY: Well, what’s the
minimum value of life today in the world? We have to have a
minimum value. REIHAN SALAM: That’s a deeply
uncomfortable and problematic idea, and you’re right. And you’ve taken it there. DOV CHARNEY: How much money
should the retailers pay for each life in Bangladesh? I was thinking about it today. What’s your answer? REIHAN SALAM: Well, look. My answer is whatever is going
to get that country out of the poverty trap it’s in. DOV CHARNEY: OK. Your mother got killed in
the collapsed building. You now have standing to sue
them in United States court. Not saying you do,
but you might. But let’s say you walk in to
a New York City courtroom. What kind of judgement do you
think you’re entitled to? REIHAN SALAM: I’m
sure millions. DOV CHARNEY: Yeah, well, what
are they going to get? REIHAN SALAM: They’re going
to get barely anything. But what you’re saying, Dov, is
that the world is unfair. DOV CHARNEY: I’m not saying
the world’s unfair. I think that these retailers
need their ass handed to them. And that’s going to force them
to think a little bit. REIHAN SALAM: We were both born
in North America, OK? That doesn’t make you a better
human being than someone who was born in Mexico. DOV CHARNEY: Of course
it does. REIHAN SALAM: OK. I’m going to throw it out there,
it doesn’t make you a better human being. DOV CHARNEY: No, it doesn’t. REIHAN SALAM: Yeah. But the sad fact is that simply
by virtue of being born in Canada or the United States,
your life is treated as more valuable. And why is that? It’s because for hundreds
of years this has been a developed, affluent society, and
then we benefit from that inheritance. And the thing is that if there
are countries– going back to this time travel idea– if
there’s a country that’s in 1850 or 1750, they don’t have
the benefit of that inheritance. And they’re trying to
get on the bottom rungs of the ladder. DOV CHARNEY: We’re
all in 2012. OK? Number one. Number two, OK. I don’t know. It’s not when you go there
the clock doesn’t suddenly say 1850, OK? We’re in 2012. These are international
companies. We’re in 2013. What’s the matter with me? OK. We’re in 2012. REIHAN SALAM: Time travel’s
happening right before our eyes. OK. DOV CHARNEY: With me, I’m
always a year behind. So we’re in 2014, 18, right. We’re in 2013. These guys had a
building fall. Their contracts were in there. This is not the first
industrial accident. This is the second one. And then a week later there
was another one. REIHAN SALAM: But look, the
wages are higher there now than they were five
years ago, right? DOV CHARNEY: I’ve got to
tell you something. If they’re going to make clothes
and sell them to rich people in Toronto and London
and New York, they’d better get their act together or
they’re engaging in death trap manufacturing. Period. OK? Death trap manufacturing. It’s going on. Loblaws is a major operator. REIHAN SALAM: What
about my liberty to work in the factory? I’m in the Kalahari desert and
I’m like, you know what? It sucks being a herder. There’s a drought. This stinks. What about my liberty to
work in the factory for the lower wage? DOV CHARNEY: You’re going to
get screwed hard enough getting paid a buck
or two an hour. $0.20 is too hard a screwing. We shouldn’t even allow it. Just like I’m not allowed to
hire you as an intern in California even if you
want to be hired. I’m sure there’s a young
kid there, I just wanted to be an intern. OK? And I couldn’t be. I wanted to be an intern
at the “LA Weekly,” but I couldn’t. It’s too bad. You’re not going to get to be an
intern unless they pony up $8.00 an hour. REIHAN SALAM: OK, so I have a
sense of how you’re looking at this and it makes sense. DOV CHARNEY: I’m talking
about the minimum. I’m talking about free liberty,
freedom, commercial freedom for everyone, but with
a basic no slavery allowed. REIHAN SALAM: So now I want to
talk to you about tell me about where you want American
Apparel to go next. OK? So are you thinking that you
guys have the right model? H&M has the wrong model because
it’s, as you say, built on slavery? So what you’re saying is that we
have the right model and is that why you think you guys
are going to succeed and flourish because you’re doing
the right thing and consumers are going to reward you for
doing the right thing? DOV CHARNEY: If I had a group
of 10 MBA students from Harvard University over here and
we were going over, I’ve already broken the sweat
shop paradigm. Now you have to have
an imagination. In scale, American Apparel only
made $617 million dollars last year and you have to
imagine, well, if the company does a billion dollars and you
scale everything, and each store does about 20% more, and
the internet business doubles, and you figure that we could
probably get 300 to 500 basis points out of our margin once
we scale the business, what does the profitability
look like? It looks like they did break
the sound barrier as far as not having to rely on slave
wages to assemble. OK? So we’ve already accomplished
that, but for the world to see it we’ve got to really, boom. I got to make a certain
level– REIHAN SALAM: So is that
your mission right now? Your mission is to demonstrate
that you can succeed without relying on– DOV CHARNEY: Right. Well, I already had
demonstrated, in my point of view if you carefully dissect,
it’s a little bit foggy and there’s hair on the story, but
if you carefully dissect my financial statements, I’ve
landed the plane. Now I’ve got to scale it. I’ve got to take it from $617
million to $1,000 million, approximately. At about $1,000 or $1,100
million, which is $1 billion to $1.2 billion, the thing, it
starts to really make sense. So if I scale it, then
how do I scale it? It means I’ve got a store over
here in Williamsburg. I’ve got to sell about 20% more
per store, which is about a grand a day. OK. First store worldwide. Every store, every day, 365. It’s got to go up
a grand a store. Then I’ve got to double my
internet business, OK? I’m doing about $50, $60, $70
million on the internet. I’ve got to double it. OK. Then I’ve got to bring up
my margin four or 5%. That’s like $1.50 a piece. Whether I lower some costs or
raise some selling, whatever. And this company will be worth
a multiple billion dollars. And I’ll be able to say, boom. We did it without. We leveraged art, design,
technology, marketing, what have you. REIHAN SALAM: Are machines
part of the story? Are more machines in
the factory relying more heavily on– DOV CHARNEY: No, but we’ve
automated our distribution center, which so far has been
a disaster the first five weeks in, but you know, it
should get better, OK? That’s the way it goes
when you automate. There are all kinds. We’ll continuously automate
over the next 25 years. But when I hit 80 years old I
want to say, I was an avant garde thinker. The boy didn’t rely on slave
wages to get it done. And maybe it wasn’t
as glamorous. I wasn’t over there in the
helicopter or anything. Or I didn’t have the private
jumbo jet or whatever, but I got it done. REIHAN SALAM: Have you always
felt this strongly about this? Because when you were first
talking you were saying, look, we cared about the quality,
we had the better t-shirt. DOV CHARNEY: Well, I’ve
been in and out of it. On some days, I’m like you. I’m love it or leave
it competitive. But on other days, there’s a
little bit of compassion. So I bark and then I hug
and then I think and I love and I bark. I’m like a dog, you
know what I mean? You know? I’m a loving dog when
I’m competitive. REIHAN SALAM: So what did you
think when you heard that the factory had collapsed
in Bangladesh? What was your immediate reaction
when you heard that? Because it sounds to me
as though you really– DOV CHARNEY: I was very
sad for those people. Because I know what it is to
work on a sewing machine. Not only did my grandmother work
on a sewing machine, but I know I have people that
work for me that are on a sewing machine. So I know it’s serious work. It’s sweating labor
for $0.20 an hour. It’s a shame. It’s an embarrassment and they
didn’t even keep a proper building, you know? I know they got screwed. I know they got screwed by the
relentless pursuit of low cost in my industry. OK? You could have a great ad
campaign, could promote. We know it in the fragrance
industry that a great ad campaign from a crap ad
campaign makes all the difference. They could put the money
into marketing. They could get the value out
of this differently. They don’t have to screw
a 26-year-old woman in Bangladesh to get it done. It’s too hard, man. They went too far. I was sad for the lives. I was hoping. OK, I heard 100 people,
shit, that’s real bad. 100 people. But then it went to 200. I thought, oh my God. 200. 300. 400. Then 700. Then 800. 1100 people. I think the CEOs of the top 50
apparel companies should be coming together and have
a talk about it. 1,100 people? I mean, only 3,000 people got
hit in the World Trade Center and we talk about it every
day in the United States. And it’s like, when you see
the flag on the subway you think about that. When you see the flag on a
Greyhound bus, when you go to the airport, you feel it. OK? You feel September 11. This is a September 11, I
think, for the apparel industry and for the working
people of apparel. I mean, we still talk
about a fire. I think it’s the Triangle,
what’s it called? REIHAN SALAM: Yeah, the Triangle
Shirtwaist Fire. DOV CHARNEY: The shirt. So now in 2013, it’s
100 years later. That changed the industry. And why can’t they now pledge
to have mechanisms for extensions, OK? There has to be mechanisms for
extensions on short term contracts in the apparel
industry. And there has to be a
minimum wage set. REIHAN SALAM: OK, I
want to ask you. So there are going to be some
young people watching this, young people who buy a
lot of fast fashion. It’s an important part
of their life. It’s an important part of their
self-expression, their creativity. What’s your message to them? Person who is buying clothes
from these folks who are relying on workers in the
developing world earning very, very low wages, sometimes
potentially in unsafe conditions. What’s your message to that
15-year-old, that 25-year-old who’s buying that bikini
for $4.99? What’s your message to them? DOV CHARNEY: One, nothing’s
black and white. Don’t take anything I’ve
said as truth. Don’t take anything that
you’ve said as truth. But open your mind and
think about where things are coming from. And also think about how you
want to construct your own life and what impact you might
want to make when you own your own business or work
in another company. And I think what’s most exciting
about being a young person today is try to construct
a business or try and get involved with business
activities or commercial activities that whereby everyone
touched by the business process has a
positive experience. That’s Deming. There was a business
philosopher by the name of Deming. Is it Arthur Deming? I forgot the first name. REIHAN SALAM: I thought
it was William. But he was loved in Japan. DOV CHARNEY: Yeah, they
loved him in Japan. REIHAN SALAM: Continuous
improvement. DOV CHARNEY: Yeah, continuous
improvement. And one of the things he
says, forget about the bottom line sometimes. Just focus on making sure that
everyone touched by the business process has a
positive experience. Those are things you want to buy
into, that’s the kind of energy you want to collaborate
with and focus on that. Nothing’s black and white. And it doesn’t mean don’t
shop at H&M. That’s not the story, OK? It doesn’t mean come shop to
American Apparel because I’d be lying to you. OK? But be aware of who you are and
what you’re doing and how you can contribute to life, and
just keep an open mind. REIHAN SALAM: When you’re 15
years old and you were hustling and you were moving
huge suitcases full of Hanes t-shirts on the Amtrak to
Montreal, what would you have made of where you are
right now and what you’re doing right now? Do you think that the
15-year-old Dov would have been proud of the Dov now, and
the CEO of American Apparel? DOV CHARNEY: I don’t know. I’m linked. I’m still 15 right now. I don’t know. I don’t know. It’s the same guy. You know? When I think of him, it’s me. I knew I was going to be
something like I am now. I was as confident then– I was a little more
confident then. I was a little more confident
then than I am now. But you know what? I knew the world was mine. That’s it. When I was on that train,
choo, choo, choo, choo, choo, choo. I knew I was taking over. And I loved crossing the US
Canadian border because I saw just something. I remember when the trees
would go from maples to willows or willows to maples
because the trees were slightly different. Just the whole, when the
products changed. You know the O’Henry
bar in the States? O’Henry’s are much
better in Canada. Ask all the boys over here. I guess there’s something
I love. I love the North American
landscape. And America’s my country. I felt that way even before
I had a US passport. I always felt America
was mine. You know? And Canada is mine. But I really think the
world is ours. It’s mine and it’s yours. And I believe in humanity. I believe that where there’s
continuous improvement in how we operate as human beings. There should be minimum
standards in the playing field of business. That I support. Little, little, little,
little. Like a minimum wage, but
otherwise it’s for each man on his own. I believe that we’re all
employees at will and love it or leave it, take
it or shove it. If you don’t like the
job, take a hike. I’m into that kind of American
can-do spirit. Take the job, do it,
or get another job. But I think when it comes to the
lowest level, there’s the minimum, minimum, minimum to the
poorest of the poor, big corporations have to pay
at least a little. Just take care of
the little men. The most vulnerable have
to be protected. These people in Bangladesh
are vulnerable. And someone has to speak for
them and I think that they deserve something better
than they’re getting. REIHAN SALAM: Thanks
very much. DOV CHARNEY: All right.


  • Reply Bubba Gump June 4, 2013 at 6:04 am

    Seems like a cool guy.

  • Reply Bubba Gump June 4, 2013 at 6:06 am

    If it ain't made in America I don't want it. 🙂

  • Reply 1111111 June 4, 2013 at 6:21 am

    Great and really knowledgeable guy

  • Reply domjubgwefer June 4, 2013 at 10:08 am

    Those pant look really uncomfortable.

  • Reply domjubgwefer June 4, 2013 at 10:09 am

    Eyd loik ta see a Sweed make a tee shoiut!

  • Reply Bubba Gump June 4, 2013 at 10:52 am

    YEa I do. It's fun to Troll though. I got a PS3. I was made in Vagina myself.

  • Reply jakus morrison June 4, 2013 at 12:44 pm

    Dov Charney reminds of an 80's dude high as fuck on cocaine.

    But in all seriousness, he had some good points but seemed a bit too evasive and eccentric on a lot of questions, especially near the end of the interview.

    I didn't like when the interviewer had questions like "aren't the consumers responsible for low wages, safety conditions in a way?" etc etc. Consumers are way too tuned out to know the living standards in garment manufacturing countries. We have iPhones made from conflict minerals

  • Reply D Fir June 4, 2013 at 6:31 pm

    The reason the workers are stopping subsistence farming, leaving the countryside and heading to the cities/factories is because the massive agro-corporations are driving them off their land, not because $0.21/hr is more enticing.

  • Reply DK3CHAMP June 4, 2013 at 8:34 pm

    Did the interviewer just get done with fox hunting before the interview?

  • Reply Benjamin Rood June 5, 2013 at 12:23 am

    'Do you support Slavery?'

    Charney is right, this is a black and white issue. There is no relativity the way that the interviewer keeps insisting. You don't deal with the theoretical situations the 'but ifs' that the interviewer keeps injecting (like cambodians exploiting cambodians instead of swedes exploiting cambodians, as if somehow that is relevant to the discussion anyway), you deal with what you know, which is that it's slave labour and we can all afford less clothes that cost a bit more.

  • Reply Benjamin Rood June 5, 2013 at 12:24 am


  • Reply Benjamin Rood June 5, 2013 at 1:01 am

    Why? Because he's not some cookie-cutter bullshit fraudster suit that doesn't say anything but what's on a press statement, because he's an individual with an opinion and enthusiasm? Because he's complicated? You think there have never been eccentric, energetic, crazy passionate businessmen? What a lazy piece of crap statement. Where are your millions a year in revenue every year, buddy. What gives you the right to be so smug.

  • Reply Benjamin Rood June 5, 2013 at 1:03 am

    And on top of that he says don't believe what I've said because I've said it, investigate and question. What a good, complicated, interesting bugger. XD

  • Reply Benjamin Rood June 5, 2013 at 1:09 am

    I know what you mean… but seriously, I have never done drugs, least of all coke, and I am mental and passionate like this naturally. Sometimes it works for people, sometimes it doesn't. I agree with everything else you say, but that statement is not fair and it's an unfair characterisation. Some people are just workaholic nuts naturally, even with a conscience sometimes, too 🙂

  • Reply Benjamin Rood June 5, 2013 at 1:13 am

    He could also be on safari or something too… it's odd to hear an interviewer on VICE sound and talk and dress like someone from Atlantic Magazine.

  • Reply Akash Patel June 5, 2013 at 2:04 am

    The Indian dude looks like his butthole is clenched through out the interview.

  • Reply Plain-P June 5, 2013 at 6:34 am

    Cool story bro

  • Reply media June 5, 2013 at 7:05 am

    great discussion

  • Reply Muna Hamid June 5, 2013 at 1:26 pm

    should be renamed 'dov charney hating on h&m on coke' – valid points though, always thought about the minimum wage argument

  • Reply Muna Hamid June 5, 2013 at 1:26 pm

    he's bengali.. cool input

  • Reply john jinglehimer June 5, 2013 at 3:16 pm

    dont think it was just haines tshirts Don was smuggling in those suitcases…..

  • Reply PandemicTheorem June 5, 2013 at 4:52 pm

    this interviewer literally played Devil's Advocate for a whole fucking hour. That is not how you do an interview. Holy Shit.

  • Reply Akash Patel June 5, 2013 at 7:24 pm

    yea and im philadelphian not american.

  • Reply Jordan J June 5, 2013 at 8:07 pm

    Fuck ethics, American Apparel is better for AMERICA's economy than a labor exporter.

  • Reply george washington June 5, 2013 at 8:32 pm

    Exactly, that's why they are responsible.

    "in a world of information ignorance is a choice"

    the thing is people don't want to give up the luxuries and the security of technology to aid you in your every endeavor. It's the mass population's apathy that is keeping things like these running.

  • Reply Baloney Duet June 5, 2013 at 8:41 pm

    He is Indian guy? I thought this black guy advocates for slavery. That would be irony.

  • Reply Kate Korte June 5, 2013 at 10:12 pm

    Yay!! Thank you American Apparel for going sweatshop free, I definetly support you guys, going to be buying lots of summer stuff at American Apparel now!

  • Reply Benjamin Rood June 6, 2013 at 12:37 am

    Absolutely correct. The saying 'Ignorance is Bliss' is no longer valid in our world (in least in technological democracies) – in reality ignorance is a vice.

  • Reply Benjamin Rood June 6, 2013 at 12:39 am

    He's just hashing some fashionable excuses and quotes from a lecture he went to once from his privileged Ivy League school. It's total B.S.

  • Reply Benjamin Rood June 6, 2013 at 12:44 am

    Yes, despite what Charney says in this interview, and as impressed as I am with him, this part of his business is entitled to the criticisms you've mentioned. This sexualization is potentially harmful to society as well, and quite probably exploitative of the young models involved, too. Only difference I guess is that as workers they _do_ get paid and they _do_ have alternatives…. but that said, I still think it is somewhat exploitative.

  • Reply tijames June 7, 2013 at 1:14 pm

    Hey, Reihan Salam. When you're playing the devil's advocate, you should make the case that their solution to this problem is actually feasible and it clearly is not. Of all the things you say, what bothers me the most is that you hold onto this fictional narrative of free market capitalism than can go on unrestricted hoping that someday it will provide more than what it gives us now. That's not how change works. We're all in 2013, no country is behind us. We can all move forward together.

  • Reply Ryan - June 7, 2013 at 8:42 pm

    17:06 epic guy in background!!

  • Reply God King Blacc June 8, 2013 at 11:50 pm

    This nigga is high af!!!! haha!!!!

  • Reply Author Author June 9, 2013 at 1:07 pm

    Lost Youth Volume 1 and Lost Youth Volume 2 is right up your creative alley Vice team as truly you're be liking a lot. Thank You from the rock n rolla author Christian Simpson

  • Reply Zack Slater June 10, 2013 at 5:10 am

    How did the Indian dude get into those pants ?? O.o It's Mindboggling

  • Reply heatedfrost June 10, 2013 at 7:32 am

    this guys is giving H&M a lot of shit

  • Reply heatedfrost June 10, 2013 at 7:41 am

    Dude, this interviewer is churning out "what if" scenarios to a guy that's fucking LIVING IT. "What if H&M raises wages and they fall behind?" Dude, Charney's running a profitable clothing company TODAY on decent wages. That makes this a ridiculously stupid question.

  • Reply heatedfrost June 10, 2013 at 7:50 am

    His historical-economic arguments are insane. The West got to where it was in labor laws because of striking unionization in the early 1900s. There was a sudden change in labor standards, and it didn't cripple anyone economically. It created amazing cash flow. The exact same thing would happen in Bangladesh if clothing manufacturers took the lead, except it would function as money creation within those borders, and there would be even more potential for immediate growth.

  • Reply Gorebashed June 10, 2013 at 9:30 pm

    I think the interviewer is completely missing the fact that the reason our countries are so developed is primarily through the use of slave labour and other countries' natural resources. It is also often a significant factor for the current state of these developing countries. Paying a decent minimum wage (especially when they can freakin afford it!) is the least we could do by way of taking responsibility.

  • Reply RATMescher June 11, 2013 at 5:32 am

    Look, Vice, I don't buy into the mythical idea that journalists are totally objective. Any thinking person comes to a conclusion. And that conclusion can be different than mine. But here we have an interviewer interrupting and talking over his guest to present theories taken out of some ultra right wing economics textbook. Please, train your journalists to ask a pointed and succinct questions. I listened to this because I wanted to hear Dov, not what the interviewer learned last semester.

  • Reply DAVID FAYDELAROSA June 11, 2013 at 5:49 am

    He looks like a 70's cocaine smuggler.

  • Reply martydrooo June 12, 2013 at 8:34 am

    Marginally. You don't think all those illegal workers and barely legals dont send 80% of their check back home?

  • Reply martydrooo June 12, 2013 at 9:01 am

    well deserved

  • Reply heatedfrost June 12, 2013 at 10:04 pm

    If you think that's a non-ethical concern, you're fooling yourself.

  • Reply India Samara June 12, 2013 at 10:37 pm

    yes, 80% of them lol

  • Reply India Samara June 12, 2013 at 10:38 pm


  • Reply martydrooo June 13, 2013 at 2:23 am

    I used to go by a store that had western union service near downtown LA where a lot of the manufacturing (not just apparel) is done…every 2 weeks there was a line out the door with chicanos with wads of cash in rubber bands…its not uncommon for the new immigrants, legal or illegal, to sleep like 5 to a room and all they eat is rice and beans, so like 80-90% of their check they just remit to MX or wherever. Little benefit for US economy. + they get state food aid so they spend nada

  • Reply yousufj56 June 14, 2013 at 8:05 pm

    After watching this, I'd rather buy American Apparel rather than its competitors.

  • Reply yousufj56 June 14, 2013 at 8:11 pm

    woww…dov charney is a reallyyyy realllyyy amazing guy!! At first he looked like a bum loll but after i kept watching, I realized hes a very very intelligent guy and moral.

  • Reply Latonya's Bonnet June 15, 2013 at 7:35 pm

    The interviewer needs to learn how to give a proper interview. Rule #1 Listen Rule#2 Listen Rule#3 go back to rule 2, 3!!!!! Vice this dude should not be giving interviews!

  • Reply brushhhfires June 15, 2013 at 10:21 pm

    follow your logic the whole way through: you say 80-90% of pay will be remitted to mexico. this still leaves 10-20% paid into the american economy that wouldn't be there otherwise. additionally the employer (who 'pays into' american system more significantly than a worker) receives discounted labor (compared to local wage) from the migrant. its easy to discredit migrant labor when you look at only one facet of the equation, but thats not how macroeconomics works.

  • Reply brushhhfires June 15, 2013 at 10:37 pm

    those who say AA marketting is 'overly sexual' astound me. everything a fashion brand can do to differiate itself has literally already 'been done'. their tactic is to apply identical sexualization techniques of others, to models whom more closely resemble the typical consumer. in a market saturated with overtly sexual advertising, AA's ads stand out because the characters are different, not the content! as if victoria secret's use of 'angels' is somehow more tasteful, for example?

  • Reply martydrooo June 16, 2013 at 7:09 am

    How would it "not be there otherwise"?

    Like Charney himself says, if a business can't be run without following the rules of the game its not a real business.

    So if the only way AA can exist is by hiring illegal/barely legal immigrants with more ties to their homeland than to the US its not a real business.

    Why not just have the factory in Mexico? Would be a lot cheaper for Dov, and workers would have more buying power for their wages (LA being pricy). AA = Domestic offshoring.

  • Reply themrjones June 16, 2013 at 7:30 pm

    Stop jewing those people, 20 cents an hour, jeeeeeew☜☜☜☜☜☜☜☜☜☜

  • Reply Yonghoon Kim June 17, 2013 at 11:37 pm

    Really? I think I noticed Dov talking over the interviewer alot more and not answering his questions but just repeating that "H&M should pay $2 an hour"

  • Reply Mjolnor June 22, 2013 at 2:03 pm

    Why is that white guy black?

  • Reply clos June 24, 2013 at 4:55 am

    I wonder what H&M would be like if Dov runned it… lol

  • Reply Hek7iC July 2, 2013 at 3:20 pm

    seems completely ignorant to even assume slavery is ok. treat people the way you want to be treated, and that applies on a global scale. Sorry, but i am all for human rights, and a decent wage is completely understandable to me, EVEN IF products cost more.
    This podcast was an argument of slavery vs fairness. Sorry, but just because we are the apex of society, that does not mean it is ok to work people into the ground with no room for growth. 2013 people.

  • Reply Riasat Khan July 6, 2013 at 10:20 am

    The interviewer is actually Bangladeshi-American!

  • Reply Bolton July 12, 2013 at 4:15 am

    Dov Charney reminds me of Charlie or whatever his name is in ''It's always sunny in California'' 😀

  • Reply JukeboxJellyJ July 15, 2013 at 9:40 pm

    The interviewer needs to shut his piehole and let Dov talk!

  • Reply Renée Lalonde July 15, 2013 at 10:46 pm

    These podcasts are discussions, not interviews. In interviews, the protocol is open-ended questions to get the person talking. In a discussion, both parties are contributors.

  • Reply Malinyc July 19, 2013 at 2:24 pm

    So much tension between the Jew and the Muslim I think after the shoot they went to the back to bang some nuts together

  • Reply OuterRem July 26, 2013 at 9:01 pm

    Pretty sure this isn't a regular interview guys. This is a discussion.

  • Reply Buzz McCallister July 27, 2013 at 4:48 am

    they keep interrupting each other

  • Reply yoex August 9, 2013 at 2:37 pm

    Dov's a good guy.

  • Reply cashmoneymoney August 9, 2013 at 10:43 pm

    I agree, Dov has been doing his thing for how long now? Two decades? Mr. Salam is a good host, but when he tries to talk about theories from Economics 101 with a man who has reshaped the apparel industry, it makes him look pompous and out of touch. As far as this being a conversation and conversations go both ways – let Dov speak. I don't think anyone watched this to hear what Mr. Salam has to say about international economics.

  • Reply Martin Ring Andreasen August 14, 2013 at 6:23 pm

    Dov is so gross.

  • Reply James S August 18, 2013 at 1:55 am

    Some very interesting things written about AA employees.

  • Reply Menzi Mcunu August 20, 2013 at 10:39 am

    I liked the interviewers analogy of globalization.

  • Reply Wade Alexander September 1, 2013 at 1:35 am

    Articulate opinion.

  • Reply Dub Steppa September 2, 2013 at 8:38 pm

    You have CLEARLY….NEVER….worked for this guy. -_-

  • Reply Dangerous Curves September 20, 2013 at 5:25 am

    great interview..

  • Reply NearsL September 28, 2013 at 3:56 pm

    yeah, you know nothing, the dude has been in some deep shit for the past 3 years, people do your research before actually commenting. and yeah I love AA but damn.

  • Reply NearsL September 28, 2013 at 3:56 pm

    i've heard things…

  • Reply dingus October 22, 2013 at 11:39 pm

    I truly feel he did a splendid job, better than others on vice.

  • Reply dingus October 23, 2013 at 12:13 am

    I like vice interviewers because they are not cookie cutter, they rile them up, make really speak their mind and get the real answers and showing how the person really is, in this case awesome.

  • Reply Missfit Kitty October 30, 2013 at 6:37 pm

    I used to get paid 9 bucks an hour here at the A.A. warehouse.They cut our pay down to getting paid by piece! yea, which means less than .10 cents for every item we do. If you are not quick, you won't get a good check. Thanks for the year i've been working for you Dov, gonna go find a better paying job now.

  • Reply Ross Avery December 1, 2013 at 1:56 am

    Dov you're a fucking ethical genius.

  • Reply Qwerty Direct December 13, 2013 at 8:49 pm

    They should make an AA t-shirt $100, let Kanye wear 1… 
    They will sell by the millions. Problem solved.

  • Reply ohlolololololollol December 21, 2013 at 8:31 pm

    Host is a douche.

  • Reply Yousould Beashamed December 30, 2013 at 7:56 pm

    Dov is a sick man. He created an amazing company, employed a lot of people, and made some nice albeit overpriced garments. All this comes at a price. His perversions and his ego are sinking American Apparel. He takes advantage of young girls that want to be in the fashion industry. The reason AA is in so much debt is because Dov requires a full time staff of lawyers to protect him from all of the sexual harassment lawsuits from women he abused, and all the settlements he must pay out to keep the girls quiet. Not to mention all the girls he employs in the company so he can continue to have sex with them. It would be less expensive for him to just buy hookers. Vice is just kissing his ass because he pays so much in advertising to him.

  • Reply trancein305 January 26, 2014 at 9:28 pm

    AA Founder- I Love how he keps it REAL. I like Him..

  • Reply trancein305 January 26, 2014 at 9:36 pm

    The Black Guys an IDIOT!!!!!!  WOW 20 cents a day is fine. WOW!!!

  • Reply reagansmash! January 30, 2014 at 10:35 pm

    dov is so jewish its unbelievable. that being said he seems like a pretty cool guy

  • Reply eva February 1, 2014 at 11:21 pm

    >pay the workers in Bangladesh what the swedes min wage is
    >well then you'd have less efficient workers compared to Sweden


  • Reply Seymour Booty February 11, 2014 at 3:59 pm

    He reminds me of Charlie Day

  • Reply ToaNyroc March 20, 2014 at 10:27 am

    This guy reminds me of bdoubleO

  • Reply Hagge Bänke April 28, 2014 at 4:40 pm

    They should ask him why he rapes little girls.

  • Reply Salvia02390 May 15, 2014 at 6:20 am

    All that Salam is getting it is: why are the workers there if it's such a low wage? There is something driving them into the garment industry, and while the wages seem ridiculously low to us, are probably several times higher than their former choices. No, the factory should not have collapsed on them and no one is supporting bad conditions per se. He is merely pointing out that this investment can pull millions of people out of poverty. As a Bangladeshi himself and by the questions he poses, I think Reihan understands this. Perhaps they would lose employment to a minimum wage. It's tough to say, but Dov doesn't allow a back and forth, rather just shoots down Salam as supporting slave labor. Bangladesh has a much lower cost of living than the US and we could definitely pay more, but we shouldn't impose our standards on a country so early in development. It just doesn't equate. 

  • Reply xnreyescj June 19, 2014 at 5:46 am

    aaaaaaaaaand he's terminated. wait what, he's gone.

  • Reply Kareem Ossman June 20, 2014 at 3:01 am

    This guy is the WORST interviewer ever. Everytime Dov is about to make an insightful point he interrupts him and starts spouting some bullshit about Bangladesh. We got it man you are from Bangladesh and think that slave labor over there is good now let the man talk! 

  • Reply Alfredo Yaar June 20, 2014 at 5:23 pm

    He should open an AMERICAN APPAREL fabric in china and pay $8 USD to his employees and see if this works for his economy. I'm pretty sure it will work.

  • Reply sete khan June 28, 2014 at 3:26 pm

    Now I see. Those filthy purchasers should take all responsibilties over crimes of clothing business… because they're the real criminals and benefactors of sweatshops, right? Not producers / commercial chain pocketing extra profit generated on incredibly cheap labour. Congrat… how cynic! I think these guys don't wanna let their 2-300% profit on a Tee gone away for the sake of American Economy. (-> Invisible hand? Did he cite Smith? Fairy tale…).

  • Reply ScreenTalker DotOrg September 17, 2014 at 5:12 pm

    … does not strike me as a fashion mogul in that shitty intern suit and tie…

  • Reply kcazaa November 25, 2014 at 11:43 pm

    Just some disclosure: Reihan Salam is a well known conservative, free-market thinker. That's why he's unsurprisingly opposed to fair wages or social safety nets. Dov seems to be a decent guy. He actually cares for the works and he has an ethical compass.

  • Reply Alya Govorchin May 16, 2015 at 2:45 am

    Screw Salam, man…

  • Reply MsSaudm February 11, 2016 at 12:00 am

    Oh that explains it. VICE usually interviews in a positive manner. But this guy seems to be so argumentative I could barely stand to listen. All the message is Pay a fair wage Its pretty simple. Don't exploit women and children in emerging countries. This VICE interviewer needs to go away forever. He is awful!

  • Reply Tobias April 15, 2016 at 9:55 pm

    The interviewer seems like a very naive economics student who didn't pay attention in global markets classes.

  • Reply Laura Muñoz February 4, 2017 at 4:05 am


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