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Can American Apparel's New CEO Tone Things Down Without Turning It Into Old Navy?

Paula Schneider has a tall order, and a low profile

American Apparel continues to post salacious, often-topless photos to its Tumblr. But for how long?

American Apparel has long been defined by its founder and former CEO, Dov Charney, a man who became infamous for the brand's marketing and the scandals he was embroiled in. With his ouster, the retailer has a chance to redefine what it is and will be.

The company this week named its first female CEO, Paula Schneider, a former Warnaco executive with the right pedigree and possibly the right public persona—which is to say, she doesn't really have one. 

"They need to figure out how to revitalize, re-energize and [determine] what the next chapter for the brand is," said Allen Adamson, North American chairman at brand consulting firm Landor Associates. "That's a difficult thing for even the most experienced brand builder. [Schneider will need to] find that balance between polarizing, edgy and attention grabbing." 

Incoming American Apparel CEO Paula Schneider

So far, Schneider's only public statement has been understandably noncommittal: "American Apparel has a unique and incredible story, and it's exciting to become part of such an iconic brand. My goal is to make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweatshop-free, Made in USA manufacturing philosophy."

But what about its marketing? Its (often-salacious) social media tone? Its ability to connect with young people and innovate as a brand? We won't know the answers to those questions until she takes the reins in January, and for now observers are left to guess about the brand's future based largely on Schneider's low-profile past.

According to industry executives, Schneider is known to be a fair leader, personable and intelligent. And she knows the retail industry, having run her own brand consulting firm following her years at Warnaco and having held positions at Liz Claiborne before that.  

"People will absolutely view the hiring of Schneider, who is highly qualified, as a strategic move away from Charney's reputation as the Terry Richardson of the garment industry," said Adam Padilla, founder of Brandfire. "The departure of Charney will only improve the brand's image, provided that Schneider doesn't turn the edgy catalog shoots into Old Navy commercials. Lest we forget: before American Apparel, there was nothing sexy about blank tri-blend T-shirts, or dot net domain names for that matter.  Sex sells, especially under-produced 'reality' sex, and Dov knew that better than anyone." 

Beyond stabilizing a brand that's been on shaky ground, Schneider is tasked with defining what the brand stands for and what its place as an iconic American brand should be going forward. 

Charney found success with American Apparel because he presented an image and idea that transcended the product, and some brand experts doubt that Schneider is the right fit to keep the clothing line edgy and relevant. 

"What Dov was very good at doing was presenting an image of a lifestyle and a point of view about being young in America," said Ben Parker, U.S. head of strategy for Naked Communications. "What they need to do is find, probably a person or another idea that can supplant that. ... I'm not sure that [Schneider] has the profile or charisma to be particularly meaningful to the brand's core audience of millennials." 

American Apparel's board likely considered what the right CEO profile would be to slot in, explained Jason Hanold, managing partner of Hanold Associates. "Part of that is the proven, seasoned retail CEO who has done this many times over," said Hanold. "Some of the optics [for Schneider] will be quite positive but I don't anticipate an incredibly enthusiastic market reaction nor a negative market reaction. It's probably more of a question mark because Schneider isn't as well known as, say, a Diane Neal. You just won't have that reaction with her and that's okay but that means a lot of eyes will be focused on American Apparel and their board and results and response to her leadership."

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