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American Apparel has found its knight in shining armor.
The bankrupt L.A.-based retailer was acquired by Canadian brand Gildan Activewear on Tuesday morning following a court-supervised auction for the American Apparel brand and “certain” assets for $88 million. The acquisition still needs to be approved by bankruptcy court Jan. 12, and will be finalized in February. The acquisition does not include American Apparel retail stores.
Gildan upped its initial $66 million bid — first put forth Nov. 14, following American Apparel’s bankruptcy filing — after facing competition from Next Level Apparel. Both Amazon and Forever 21 have been rumored to be eyeing the retail stores.
Said Glenn Chamandy, president and CEO of Gildan in a release: “We are excited to be moving forward with this acquisition. The American Apparel brand will be a strong complementary addition to our growing brand portfolio.”
He added, “We see strong potential to grow American Apparel sales by leveraging our extensive printwear distribution networks in North America and internationally to drive further market share penetration in the fashion basics segment of these markets.” Gildan’s printwear services already have an extensive reach; memorably, they were the brand Kanye West chose for his Yeezy tour merch, which he sold at several international pop-up shops in 2016.
The news that American Apparel was filing for its second bankruptcy in less than two years followed shortly after the announcement that CEO Paula Schneider, who had been leading the company’s turnaround efforts since the oust of founder and former CEO Dov Charney at the end of 2014, was stepping down. In part due to the high- cost of labor in Los Angeles, as well as stagnant product, the retailer had been suffering over the past few years, and has mostly been kept afloat by its wholesale business.
Gildan, which manufactures T-shirts, fleece, socks and more, is expected to keep some of the brand’s manufacturing, distribution and warehouse operations located in Los Angeles, according to WWD.
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