Dec. 17--The reaction on Wall Street was swift after American Apparel Inc. dumped its controversial founder Dov Charney.
Investors cheered the decision Wednesday, pushing shares of the retailer as high as 17% in morning trading on Wall Street.
The Los Angeles-based company endured a tumultuous summer after it suspended Charney from his CEO post, following an initial investigation that found evidence of alleged misconduct and violations of company policy.
Allegations included misuse of company apartments and allowing a blogger to post nude photos of a woman who was suing American Apparel.
On Tuesday, the company fired its longtime public face "for cause" and announced a new chief executive: veteran fashion industry executive Paula Schneider.
Investors appeared satisfied with the choice.
The company's stock lost some of its gains by midmorning, but was still up sharply. American Apparel shares climbed 6 cents, or 11%, to 64 cents.
