Canadian retailer Gildan Activewear is the victor in the court-supervised auction to acquire bankrupt US fashion retailer American Apparel LLC for $88 million in cash.
As a result of its winning bid, Gildan will acquire American Apparel's global intellectual property rights as well as certain manufacturing equipment. The deal, however, does not include any of the 110 American Apparel retail stores.
The brand also attracted interest from Forever 21, Amazon - which has been doubling down on private-label clothing brands - and other retailers.
"We realize that there's a heritage to this brand that is based on its L.A. style as well as its "Made in the USA" moniker, and those all are things we would intend on continuing", said Garry Bell, Gildan's vice president of corporate communications and marketing.
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The deal is subject to approval from a bankruptcy court on Thursday, the company said.
After failing to rein in its mounting losses, the company filed bankruptcy for a second time last November. Most of Gildan's current employees work outside the US, in places like the Caribbean and Central American countries.
It remains unclear how Gildan's purchase will affect American Apparel's employees. The American Apparel brand will be a strong complementary addition to our growing brand portfolio. The firm does have distribution centers and yarn-spinning operations based in North Carolina and Georgia.