(Bloomberg)—American Apparel LLC’s brand and some other assets were acquired in bankruptcy proceedings by Canadian T-shirt and underwear maker Gildan Activewear Inc. for about $88 million in cash, a quiet fate for the once-notorious retailer.
Gildan will separately purchase inventory from American Apparel to ensure customers receive a steady supply, the Montreal-based company said Tuesday in a statement. Gildan won’t acquire any of American Apparel’s stores. American Apparel is No. 338 in the Internet Retailer 2016 Top 500 Guide with an Internet Retailer-estimated $62.1 million in online sales in 2015.
American Apparel filed for a second bankruptcy in October after struggling to recover from a tumultuous period that included slumping sales, financial losses and the ouster of CEO Dov Charney following allegations of misconduct. Charney founded the company, gaining a following with his focus on domestic manufacturing and racy advertising.
Gildan had made an initial, or “stalking horse” offer of $66 million. Next Level Apparel submitted a bid to challenge Gildan, according to Reuters. Next Level, based in California, couldn’t immediately be reached for comment. Amazon.com Inc. (No. 1 in the Top 500), Forever 21 Inc. (No. 272) and Authentic Brands Group LLC, had considered making bids for American Apparel, a person familiar with the situation had said leading up to the auction.
Gildan will fold American Apparel into its North American distribution networks to gain market share in the fashion basics segment of the market, the company said. The acquisition may help the 30-year-old company, which has expanded into branded apparel and produces Under Armour Inc. (No. 100) socks for retail stores, grow in the more fashionable and lucrative end of screen-printing, which makes up about 60% of its revenue.