Although big name bidders like Amazon and Forever 21 recently joined the group of companies looking to scoop up bankrupt American Apparel and its assets at auction, in the end, longtime Canadian suitor Gildan Activewear came out on top.
Gildan said on Tuesday that it won the auction to take over the American Apparel brand and certain assets for $88 million, The Wall Street Journal reports.
The deal is still subject to approval by the bankruptcy court, but Gildan expects everything to be tied up by early February. As a result of its winning bid, Gildan will acquire American Apparel’s global intellectual property rights as well as certain manufacturing equipment. In a separate transaction, Gildan will also buy inventory from American Apparel while its integrates the brand into its print wear businesses.
The deal does not include any of American Apparel’s 110 retail stores, which means someone else could buy them or they could just liquidate and shut down completely.
This was American Apparel’s second spin in bankruptcy court. The company first filed for bankruptcy in Oct. 2015, after ousting its controversial CEO Dov Charney in 2014, amidst a cloud of sexual harassment allegations and generally being a jerk. He tried to buy the company back in Jan. 2016 and was rejected.
Alas, American Apparel wasn’t the only retailer to go down in flames this year: Aeropostale filed for bankruptcy but was saved by a group of mall landlords, Pacific Sunwear filed for Chapter 11 with a restructuring plan to keep stores open last April, Golfsmith sold its assets to Dick’s Sporting Goods, and Sports Authority shut down a long list of stores as part of its bankruptcy. It’s likely that The Limited will join those brands as well, after abruptly closing all its remaining stores over the weekend and transitioning to an online-only model.
by Mary Beth Quirk via Consumerist