News:


Gildan Proposes American Apparel Acquisition

November 14, 2016

Gildan Activewear Inc., Montreal, has entered into an asset-purchase agreement to acquire the intellectual property rights related to the American Apparel brand for a price of about $66 million.

While it will forego purchasing American Apparel retail stores, Gildan will separately purchase inventory from American Apparel to ensure a seamless supply of goods in the printwear channel while integrating the brand into the business.

The acquisition will create revenue growth opportunities by leveraging Gildan’s extensive distribution network in North American and international printwear markets to further increase the brand’s penetration in the growing fashion-basics segments of these markets, according to the company. Gildan also will evaluate potential wholesale opportunities for leveraging the American Apparel brand within its branded apparel business.

The acquisition announcement comes on the heels of American Apparel’s second filing for Chapter 11 bankruptcy protection, which occurred Nov. 14. The company also recently abandoned its U.K. stores by hiring KPMG as administrators to shutter the operation.


The acquisition reportedly still is in flux. According to Forbes, Gildan sent a letter to employees stating that American Apparel’s court filing will allow an auction process where other potential buyers could propose a better deal and submit competing offers. However, Gildan expressed confidence that its deal was best.

A key component of the deal, according to the Forbes report, is keeping manufacturing primarily in Los Angeles. Gildan affirmed that commitment in the letter to employees, citing its recent acquisition of Alstyle Apparel, which also is based in southern California.

Consummation of the deal is subject to Gildan being selected as the successful bidder in any such auction, as well as Bankruptcy Court approval. If it is not named the successful bidder, Gildan will be entitled to a break-up fee and certain expense reimbursements. — J.L.


More News