American Apparel will be sold to Canadian manufacturer of branded clothing, Gildan Activewear, for $88 Million. Gildan was the high bidder Monday in a bankruptcy auction ordered by the court, Reuters reported citing a person familiar with the matter.
Gildan’s first offer stood at just $66 million. Its final bid is scheduled to go before the bankruptcy judge for approval on Thursday.
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The Los Angeles based clothier American Apparel, which filed for bankruptcy in November for the second time, had received multiple bids. Companies that expressed interest included Amazon.com, Forever 21 and Next Level apparel.
According to Reuters, the Canadian company is not interested in American Apparel’s 110 stores, but its intellectual property rights, and some of its manufacturing operations in southern California. It has one of the largest garment-making operations in the United States with about 3, 500 employees.
Several U.S. retailers have filed for bankruptcy in recent months, including Aeropostale Inc and Pacific Sunwear.
The U.S. fashion retailer founded in 1998 by Dov Charney, the son of architect Morris Charney and an artist, Sylvia Safdie, sister of architect Moshe Safdie.
Charney, an eccentric Canadian university drop-out, started his first ventures in fashion at high school, when he imported Hanes and Fruit of the Loom t-shirts. He than grew to become a tycoon thanks to its racy and too sexy advertising.
After he was ousted by the company which he founded in 2014, Dov Charney, who received an $800, 000 annual salary when he was CEO, said in an interview with Bloomberg that he was down to his last $100, 000 and is sleeping on a friend’s sofa in the Lower East Side.
The company announced that he would be ousted as a consultant after having been demoted as CEO. Allegations of sexual harassment arose, but it was reported that he was generally unreliable and unstable, and after an investigation, it was determined he would not be re-instated as CEO.