American Apparel bought for $88m
The American Apparel brand and some other assets have been acquired in bankruptcy proceedings by Canadian T-shirt and underwear maker Gildan Activewear for about $88m in cash, a quiet fate for the once notorious retailer.
Gildan will separately purchase inventory from American Apparel to ensure customers receive a steady supply, the Montreal-based company said on Tuesday. Gildan won't acquire any of American Apparel's stores.
American Apparel filed for a second bankruptcy in October after struggling to recover from a tumultuous period that included slumping sales, financial losses and the forced exit of founder Dov Charney following allegations of misconduct.
American Apparel was founded in 1989 and developed a global following with his focus on domestic US manufacturing and racy advertising.
Gildan had made an initial, or "stalking horse", offer of $66m. Next Level Apparel submitted a bid to challenge Gildan, according to Reuters. Next Level, based in California, couldn't immediately be reached for comment. Amazon.com, Forever 21 and Authentic Brands, all also considered making bids for American Apparel, a person familiar with the situation had said leading up to the auction.
Gildan will fold American Apparel into its North American distribution networks to gain market share in the fashion basics segment of the market, the company said. The acquisition may help the 30-year-old company grow in the more fashionable and lucrative end of screen-printing, which makes up about 60pc of its revenue. (Bloomberg)