Gildan Activewear Inc. has won the American Apparel bankruptcy auction with an offer of $88 million. Gildan originally offered $66 million and eventually raised it, winning against Amazon.com Inc., Authentic Brands Group LLC, Forever 21, and Next Level Apparel.
The deal is scheduled to be made with a bankruptcy judge this Thursday, January 12, reports Reuters. An anonymous source has revealed to the news site that Gildan will not take over American Apparel stores which number at 110, but will rather own the brand and assume some operations at manufacturing plants in Southern California.
Furthermore, Gildan stated that it does not have any obligation to keep any of the American Apparel employees which number at 4,700 as of November, writes the Chicago Tribune. Garry Bell, a spokesperson for Gildan that is based in Montreal, said that the company has not yet decided on where to produce American Apparel goods.
In addition, creditors for American Apparel reportedly pressed Gildan to partner with another firm for the stores and other parts of the former company that it did not want. Other stores that were not liquidated by American Apparel could still be taken over and run under the American brand.
According to Reuters, the American Apparel bankruptcy auction was a result of the failure on the owners’ part to implement a turnaround plan for the firm’s $177 million debt. Similarly, other retailers such as Pacific Sunwear of California Inc. and Aeropostale Inc. have also field for bankruptcy.
Gildan is a Canadian apparel manufacturing company. According to its official corporate website, it has more than 47,000 employees in its facilities in Bangladesh, the Caribbean Basin, Central America, and North America.
Gildan’s company owned brands are numerous, namely Gildan, Secret, Silks, Alstyle, Gold Toe, Secret, Kushyfoot, Secret Silky, Comfort Colors, Anvil, and Peds. Now, American Apparel is to join the host of brands.