The Real Deal Los Angeles

American Apparel to sell brand rights, LA assets to Canadian firm

New owner Gildan won't take the brand's 195 retail stores
November 15, 2016 10:30AM

Operations Inside The American Apparel Inc. Manufacturing Facility

American Apparel factory in Downtown LA. (Credit: Getty Images)

You don’t need a closet full of lycra and oversized sunglasses to see the end is nigh for American Apparel.

The Los Angeles-based clothier reached an agreement to sell to the Canadian apparel company, Gildan Activewear, for $66 million, and filed for bankruptcy for a second time this year Monday.

Gildan is buying the American Apparel brand and the company’s manufacturing facilities in Los Angeles, but has no interest in its 195 retail stores in the United States and internationally, the Los Angeles Times reported.

Gildan intends to keep the company’s made-in-America ethos and branding, but is unlikely to continue manufacturing in LA, where the minimum wage is set to increase to $15 an hour by 2020.

Other companies will have an opportunity to bid for the troubled fashion brand’s intellectual property rights and other assets throughout the bankruptcy process.

American Apparel’s assets in the Los Angeles area include its 800,000 square-foot warehouse and headquarters in Downtown Los Angeles at 747 Warehouse Street, which the company has leased until 2019. It also has facilities in La Mirada, South Gate, and Garden Grove.

American Apparel filed for Chapter 11 protection in January and a judge approved a restructuring plan that took the company private. In the intervening 10 months, attempts to turn the company around failed. [LAT] — Chava Gourarie