American Apparel to be bought by Gildan Activewear for $88m
Canadian clothing company Gildan Activewear looks to have won the auction for the purchase of US clothing brand American Apparel, after the latter filed for bankruptcy last year.
Gildan confirmed the news on Tuesday that it was taking over the California-based fashion company for $88m in cash.
However, if the deal is concluded with approval from a Delaware court this week, Gildan will not acquire American Apparel's 110 retail stores in the US. The deal only includes worldwide intellectual property rights in addition to manufacturing equipment and inventory.
Other companies reportedly interested in the purchase were global ecommerce giant Amazon and teen clothing company Forever 21, but Gildan emerged victorious at the banruptcy auction, overseen by US courts.
"The American Apparel brand will be a strong complementary addition to our growing brand portfolio," said Gildan President and CEO Glenn Chamandy in a written statement.
"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."
Shares in the Canadian company were trading 2.9% higher in morning trading at $25.74 on the back of the news.