Please note that log in for BLAW products will be unavailable for scheduled maintenance on Sunday, February 5th from approximately 4 AM to 5 AM EST.
Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Advanced Search Go
Free Newsletter Sign Up

This Single Mom Went From Partner to GC to CEO

Oct. 19, 2016, 9:28 PM

The clothing brand American Apparel is practically synonymous with racy marketing: Imagine billboards and full-page spreads of young women in compromising positions wearing a single article of clothing, and shot in polaroid-style.

Now imagine that a high-powered M&A lawyer was handed the reins to be CEO of such a company. Would the lawyer’s proverbial ‘risk-averse’ instincts kick in, or would everything be executed more thoughtfully and carefully?

It’s no longer just a thought experiment: In September, onetime general counsel Chelsea Grayson took over as CEO.

As GC, Grayson saw the company through its chapter 11 bankruptcy and helped engineer the debt for stock swap that transformed American Apparel from a public company to private one owned by hedge funds.

She couldn’t be more different from the company’s founder and ex-CEO Dov Charney, who was ousted in 2014 amid allegations of sexual harassment and misconduct. A bachelor, he reportedly lived in a mansion on a hill with a giant sculpture of a middle finger on the lawn.

In contrast, Grayson is a former Jones Day partner and single mother of two children, to boot.

She started as general counsel in 2014, was promoted to chief administrative officer in 2015, and defended the company against Charney’s litigation to regain control of the company. On Sept. 22, she replaced Charney’s immediate successor as CEO, Paula Schneider, whoreportedly departed amid a disagreement about plans to sell all or part of the company and how it would affect the company’s ideals.

We caught up with Grayson to ask her how she’s settling into the new position, and how her past experience will shape how she runs the clothing brand, which is still best known for its risque ads , and being made in the U.S.A. A transcript edited for clarity follows.

[Image “chelsea-grayson-headshot” (src=]

Big Law Business: What’s your top goal in this role?

Grayson: My goal here has been consistent throughout my two-year tenure — I started out being initially appointed as general counsel, and then gained the confidence of the board and took a business role as chief administrative officer. My goal is always to serve this beautiful millennial customer that we have. I think that our millennial customer deserves better and more beautiful products, and they deserve it more often. They deserve a better online performance.

On the wholesale side, I want to provide platinum service. I think we can do a better job of forecasting for the wholesale customer.

And in this next phase, the board decided I was the right person to find a good partner or partners to help capitalize the company to support all those initiatives.

Big Law Business: Did being GC prepare you for this?

Grayson: I don’t know if it’s typical of other general counsels, but I got right in and got to know the business. I have had boots on the ground from an operational perspective since day one.

With this board, since we emerged from the bankruptcy, I’ve got true retail experts who I rely on and are incredible advisors. I’m a true operations person. This isn’t so different from what I’ve been doing.

Big Law Business: How did you go about learning the business?

Grayson: I think you have to be really proactive about it. Frankly, you could be reactive, and just defend litigation when it comes down the pike. You could be proactive to just make sure you’re compliant. That’s not how I approach this role at all.

I’ve been in meetings with the business folks since day one. I made sure to be in the meetings, and ultimately contributed to those meetings so they wanted me back.

I was also active in the boardroom. Now, they actually put me on the board. They came to see me, in the true sense of the word general counsel, as a counselor, not an in-house lawyer. The board isn’t here day-to-day, they’re not in the foxhole. But they are making incredibly important decisions. You want them to make educated decisions, so it’s so incredibly important to let them in on what’s happening.

Big Law Business: So who is filling your shoes as GC?

Grayson: What I did was, in effect, increased the responsibilities of my two top lieutenants of the legal department. We’ve been together as a unit since day one. One of them has become corporate secretary, which is obviously more than what it sounds like. That’s a terrible misnomer for that role. They’ve both really stepped up.

Big Law Business: How does being a single mom affect your role?

Grayson: First of all, my kids are really tough. That’s one thing. It’s been really good for my kids.

In terms of how it’s affected me doing my job, I’ve got a lot of compassion for the families we have working here – we have a lot of those. I think about the culture here. It has a lot to do with how I set the culture from the top down. Frankly I was doing that when I was chief administrative officer. It’s also about continuing to dedicate the company to the fundamental tenets that make the brand so attractive to our customers. Its LGBTQ issues, it’s empowerment.

[caption id="attachment_32211" align="alignnone” width="594"][Image “American Apparel employees punching the timeclock. Photo by Rick Meyer (Los Angeles Times via Getty Images)” (src=]American Apparel employees punching the timeclock. Photo by Rick Meyer (Los Angeles Times via Getty Images)[/caption]

Big Law Business: How will your American Apparel be different?

Grayson: I think under my tenure, the customer is going to get a lot more beautiful stuff, quicker.

I think the marketing will resonate a lot more with them. Diversity matters. Where you have marketing matters. The look and feel of it matters. I asked marketing to insert a significant amount of diversity into what we look like because that’s extremely important to us. That’s just my opinion on a personal level.

I think there hasn’t been a true marketing plan. You’ve seen some scattershot things here, but as a lawyer I very much appreciate a big overarching theme that customers can understand. So we’re going to work on that. It’s always been really important for us to go back to our roots: Just men and women in their natural state. That’s what people have always liked about us. They can see how we fit into their life.

The retail and wholesale customer are also going to get a much more bespoke experience.

But the brand itself, just on its own without any help, is so strong. You know what we’ve gone through in the last two years. I mean, this is a place where it’s still so sexy to come and shop. It’s still a place where people can come and Instagram it. There’s something so special about it.

[Image “blb newsletter” (src=]