Published: Thu, January 12, 2017
Economy | By Melissa Porter

After auction, will American Apparel still be 'American'?

Before the auction, American Apparel creditors urged Gildan to find a partner for the parts of the company it didn't want, including the stores.

Canada-based Gildan Activewear (GIL) on Tuesday said it has won a US bankruptcy court-supervised auction for the embattled California-based fashion company with a roughly $88 million cash bid. The transaction is subject to Bankruptcy Court approval on January 12, 2017, and Gildan anticipates completing the acquisition by early February.

While Bell said Gildan is considering hiring some workers in product design and merchandising, approximately 3,500 American Apparel employees have received notices that they could be laid off as soon as this month, according to California public notices.

Charney stood out among his rivals by focusing on making well-crafted basics in the USA when clothing manufacturing was flowing to Asia.

"We are excited to be moving forward with this acquisition, " Gildan president and CEO Glenn Chamandy said in a news release.

The company will operate normally until the sale is approved by the DE judge overseeing the bankruptcy and the deal closes, which would be at the end of this month at the earliest, according to an American Apparel spokeswoman.

The bulk of Gildan's manufacturing takes place overseas in the Caribbean and Central America. The American Apparel brand will be a strong complementary addition to our growing brand portfolio.

American Apparel was founded in 1989 and developed a global following with his focus on domestic United States manufacturing and racy advertising.

American Apparel filed its second Chapter 11 in November with about $177 million in debt after the failure of a turnaround plan implemented by its owners, a group of former bondholders. The company filed its first Chapter 11 in October 2015, and emerged early a year ago.

While Gildan is known for mainstream basic apparel, American Apparel is known primarily for its sexually oriented advertising and chief executive Dov Charney, who faced allegations of sexual harassment in the workplace.

And will American Apparel's goods still be "made in America"?

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