Canadian clothing maker Gildan Activewear said Tuesday that it would buy the rights to the beleaguered California-based company's brand after placing the winning bid in a bankruptcy auction.
The transaction is subject to approval from a bankruptcy court on January 12, Thursday, the company said. "The company will also separately purchase inventory from American Apparel to ensure a seamless supply of goods to the printwear channel while the company integrates the brand ...", Gildan announced.
American Apparel has had an incredibly tumultuous couple of years, starting in 2014 when they fired the founder and CEO of the company Dov Charney.
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Gildan is understood to have beat off competition from Next Level Apparel, while the auction also reportedly attracted interest from online giant Amazon and teen apparel chain Forever 21.
American Apparel founder Dov Charney was sacked in 2014 for allegedly violating secual harassment policy.
So what will happen to American Apparel's 3500 L.A. workers who were notified last month they could be laid off as soon as last week? The American Apparel brand will be a strong complementary addition to our growing brand portfolio. Montreal-based Gildan Activewear has agreed to buy the brand for US$88 million. The Gildan acquisition doesn't include the brand's 110 remaining stores. The firm does have distribution centers and yarn-spinning operations based in North Carolina and Georgia.