Dov Charney says he may open manufacturing operation in London or Paris for his new business

Dov Charney is considering opening a factory in London to make T-shirts for his new business as American Apparel, the company he lost control of two years ago, files for bankruptcy in the US.

Charney has an as-yet unnamed fashion business with a factory employing about 50 people in the South Central neighbourhood of Los Angeles. He described his new business as “rapid reaction urban manufacturing”, providing fast turnarounds for online retailers and the music industry.

“When Asos need T-shirts they don’t want to run around India or Bangladesh. If Kanye West needs T-shirts, he wants them in his shop [quickly],” Charney said.

American Apparel's UK business goes into administration Read more

He said as his business develops he may open a factory in London or Paris to be on the ground for his customers in Europe.

Charney said his policy of manufacturing clothes in the US was viable and that the additional cost had nothing to do with the decline of American Apparel. He said making a T-shirt in China cost only 60c or 70c less than in the US or the UK.

American Apparel has filed for bankruptcy in the US for the second time in just over a year. The brand, which at its peak had more than 200 stores including 18 in the UK, has suffered falling sales. The company’s remaining British business, including 13 stores, went into administration on 8 November.

Charney was fired two years ago as chief executive of the company he founded in 1989 while at university. The board accused him of misusing company funds.

He accuses a group of hedge funds of taking the company from him and mismanaging it. He said the company used lurid tales of his sexual adventures, including harassment allegations, to discredit him.

American Apparel combined sexy, fashionable clothing with ethical production. Instead of making clothes at low cost in Asia, Charney opened a factory in Los Angeles, paid good wages and used “made in USA” as his strapline.

Gildan Activewear, a Canadian clothes manufacturer, has agreed to buy the American Apparel brand and certain assets for about $66m in cash. It would also buy stocks of clothes but the deal did not include retail stores.

