American Apparel, well known for their risqué advertising, has come to the end of its era in the fashion industry as the beleaguered retailer will be closing its Los Angeles headquarters, and all 110 of the remaining stores it had in the United States by the end of April. However, the brand name is expected to continue to live on.
The American Apparel brand was sold on January 10 to the Canadian company Gildan Activewear, at a bankruptcy auction for $88 million, which included American Apparel’s intellectual property rights and manufacturing equipment. According to Adweek, Amazon and Forever 21 were also competitors in the bidding on the sale of the bankrupt company. The Montreal-based Gildan is in the business of affordable clothes and makes T-shirts and other items of clothing which can be screen printed. It seems they have zero interest in the 110 American Apparel stores in the U.S. though, and have opted not to assume the leases on the distribution center in La Mirada, along with the factory in Los Angeles, where all the clothing the company produces originated.
All American Apparel stores will be closed by the end of April.https://t.co/0Sn1CTmwEt— LIVE 105 (@LIVE105) January 14, 2017
Gildan Activewear will now be adding American Apparel to its considerable portfolio, which includes Gold Toe socks and Silks hosiery. Gildan is also said to have licensing agreements with New Balance, Under Armour, and Mossy Oak. Glenn Chamandy, president and CEO of Gildan, gave a statement regarding the direction the company will be undertaking with its new acquisition.
“We see strong potential to grow American Apparel sales by leveraging our extensive printwear distribution networks in North America and internationally to drive further market share penetration in the fashion basics segment of these markets.”
It seems that Gildan intends to snap up the AA branding to complement its own printwear business, but what this means for the styles and fashions of the existing Gildan and American Apparel brand is something only time will reveal. One of the things which set the made-in-America brand apart from its competitors was the trendy and often controversial ad campaigns at the center of its marketing strategy and they will undoubtedly be missed. The brand was founded in 1989 and became known for those ads, as well as their sweatshop-free policies. The founder of the brand, Dov Charney, also became known for a series of sleazy deeds and is no longer affiliated with the company.
In 2014, Charney was fired from his CEO position after facing a nude photo scandal involving an employee, as well as several sexual harassment lawsuits from other employees. He was also at the heart of the racy advertising campaign, which received so much criticism. After Churney left the company, American Apparel refocused and last year launched a new marketing initiative which included additional clothing sizing options.
Unfortunately for the workers at American Apparel, about 3,500 people could be out of work within the next few days as Gildan Activewear takes on the process of closing down the stores. Cosmopolitan magazine wrote that Lloyd Grief, the Chief executive of investment banking firm Greif & Co. was not involved in the deal, but weighed in regarding the closing of the U.S. stores and the loss of the factory positions in Southern California, which will result.
“[Gildan does] have a plan, and that plan doesn’t involve U.S. manufacturing and certainly not Los Angeles manufacturing.”
Gildan spokesman Garry Bell also discussed the expected loss of jobs with the media and said that the purchase of the failing brand was “always about buying assets out of bankruptcy. The reality is this wasn’t a purchase of an ongoing concern.” The bankruptcy sale of the brand comes after years of internal turmoil and will mark the end of American Apparel’s 20-year-run as one of the biggest garment makers in the country.
There are sure to be “going out of business” sales, so lovers of the brand should be on the lookout for upcoming deals.
[Featured Image by Keith Srakocic/AP Images]