American Apparel May Be Shuttering All Their Stores After Being Bought By Canadian Company, Says Report
Canadian clothing manufacturer Gildan has won its bid for American Apparel, reports Reuters.
Last week, we reported that Gildan had put out a $66 million bid on the L.A.-based clothing company, which was put up for auction after it’d entered bankruptcy. Several companies—including Amazon and Forever 21—were reportedly in the mix as potential buyers. But, ultimately, Gildan fended off the others by raising the amount to $88 million (in cash!).
While Gildan has bought manufacturing equipment and intellectual property rights from the company, it has opted not to pick up American Apparel's manufacturing plants, or its 110 retail stores. This leaves a big question as to where the clothes will be made, and where they will be sold. A CBC News report went as far as saying that all American Apparel stores are expected to close.
The implications are big for a number of reasons, as American Apparel has upwards of 3,500 workers in Southern California, with at least 2,100 of them working in its L.A. headquarters, according to the L.A. Times. Earlier in December, the company notified all of its workers that layoffs may be imminent.
There were reports earlier saying that Gildan might buy and keep some of the manufacturing plants in California. And it seems that the company is leaving the window open for that possibility. Garry Bell, a Gildan spokesman, told Reuters that Gildan will figure out what they'll do about manufacturing after they've integrated the brand into the Gildan catalog, adding that more information about the company's future plans will be coming in late February. He also noted that Gildan has no "apprehension about investing in the United States." Reuters noted that the company is the largest domestic consumer of U.S.-grown cotton.
It's worth nothing, though, that while Gildan is Montreal-based, and while most of its distribution centers are in the U.S., most of its employees are located in Central America. As noted on the company's website, Gildan has about 34,000 workers in Central America, compared to 2,400 in Asia, 3,800 in the Caribbean Basin, and 3,000 in North America. And the only thing that Gildan actually makes in the U.S., apparently, are socks.
All this is coming at a time when the outsourcing of jobs has become a hot-button topic, thanks to a certain tweet-happy President-elect. Trump has publicly (and pithily) denounced companies like Ford and Carrier for allegedly moving their manufacturing to other countries, and he has taken credit for preventing some of these moves (though his claims are likely greatly exaggerated).
Will he step in to "save" American Apparel as well? America's favorite purveyor of leggings? After all, the company was an (unwitting) presence on the Trump Presidential campaign, as American Apparel gear was turned into Trump memorabilia.
LAist has reached out to both Gildan and American Apparel for comment, but neither party has responded.