It looks like it’s the end of the road for American Apparel — at least as we know it.
Canadian apparel manufacturer Gildan Activewear Inc. emerged as the winner in the court supervised auction to acquire the intellectual property and some other assets of the bankrupt American Apparel brand. The company, however, will not be purchasing American Apparel’s 110 retail stores, leaving the company’s retail future in doubt. Also uncertain is the fate of American Apparel’s garment workers at its factory in Los Angeles.
“We've never been in a position to be able to assume operations," Garry Bell, a Gildan spokesman said in a Chicago Tribune report. "We're not buying an ongoing concern."
Gilden’s $88 million winning bid was higher than its initial proposal of $66 million, which was made back in November as part of a stalking horse portion of American Apparel LLC’s Chapter 11 bankruptcy protection filing.
The deal is subject to approval from a bankruptcy court on Thursday.
Gilden, which is based in Montreal, said it 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 within its printwear business.
"The American Apparel brand will be a strong complementary addition to our growing brand portfolio,” said Glenn Chamandy, president and CEO of Gildan. “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."
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