American Apparel will soon be Canadian. The Los Angeles based embattled apparel company will close all its retail locations and its headquarters in LA after last week’s purchase of the business by Gildan Activewear a company based in Montreal.
All 100 of the stores will be shuttered before the first of May, with up to 3,400 people expected to be unemployed. The sale comes after the once very popular retailer filed in 2015 for bankruptcy and again this past November.
A spokesperson for Gildan said the purchase was always related to the buying of assets from bankruptcy and not about purchasing an ongoing concern.
Gildan, whose brands include Anvil and GoldToe socks, has factories in the Caribbean, Bangladesh, Central America and the U.S., showed the company’s website.
The only finished goods currently produced inside the U.S. are its socks, said one of the local media reports.
Although the brand American Apparel is expected to live on, it will likely be much different from today’s version.
Analysts forecast that the manufacturing operations will not remain in California, especially with California planning an increase to its minimum wage.
Because clothing of Gildan’s is sold through different retailers, it has been suggested that any items of American Apparel in the future will be found in stores such as Target and Kmart or other wholesale buyers.
The founder of American Apparel, Dov Charney, was fired during 2014 following accusations against him of sexual misconduct and miss using funds of the company.
Today Charney is working on another business says a post on his own website that showcases a project related to photography known as That’s Los Angeles.
American Apparel a decade ago was the apparel industry’s darling company rising from being a small importer of t-shorts in Montreal to all the glitz and glamour of Hollywood.
The racy and often times controversial advertisements drew the attention of twenty-somethings as they flocked to the logo-free hoodies of the company as well as the retro underwear and sheer bodysuits.
However, the recession, inability to make changes quick enough in the changing trends of fashion and mismanagement caused the company to drop in popularity and profits. Since 2009, the company has not turned a profit.
It all came to an end last week when Activewear announced that is bought the company at a bankruptcy auction for just $88 million.
This story was originally published by sleekmoney (https://sleekmoney.com) and is the sole property of sleekmoney. If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. You can view the original version of this story at https://sleekmoney.com/american-apparel-closing-all-stores-after-being-purchased/1606858.html
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.