American Apparel may be sold to Canadian clothing maker Gildan Activewear. American Apparel makes colorful basics. The company has filed for bankruptcy. This year, American Apparel laid off at least 500 workers as it cut production. An additional 3500 employees may lose their jobs in January.
However, Gildan has no interest in buying American Apparel’s 110 stores in the US and 83 others around the world including UK, Ireland, Germany, Spain, Canada, Japan and Australia. The Canadian clothing company is more interested in buying some of American Apparel’s manufacturing plants in the US. But most production will probably move to Gildan’s manufacturing hubs in Central America and the Caribbean where it’s much lower cost than anywhere in the US.
Gildan Activewear bid 66 million dollars to acquire American Apparel’s Apparel’s intellectual property rights and some other assets. American Apparel, based in Los Angeles, began as a wholesale T-shirt business in 1998. It eventually built an image around provocative advertising for fashionable merchandise. But the hoped-for turnaround of the clothing manufacturer and retail chain—which has long grappled with shrinking sales and an outsize store footprint—did not happen. A plan to improve online selling didn't pay off, and, at a time when shoppers are going online in greater and greater numbers, American Apparel watched its online sales fall.