American Apparel Inc (NYSE: APP) shares jumped in after-market action Tuesday after the company fired its controversial founder Dov Charney.

Charney served as a consultant to American Apparel following his suspension in June as chief executive for alleged misconduct and violations of company policy.

American Apparel shares, down 53 percent year-to-date, changed hands recently at $0.63, up 8.6 percent.

The retailer and manufacturing company on Tuesday named Paula Schneider CEO effective January 5, replacing Scott Brubaker, who had served as interim CEO and who will continue as a consultant.

Snyder has served as president or senior officer of a number of retail and apparel companies, including Warnaco, Gores Group, BCBG Max Azria and Laundry by Shelli Segal.

Following an internal investigation, a committee of American Apparel's board "determined that it would not be appropriate" for Charney to be reinstated as CEO or an officer or employee, the company said Tuesday.

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