The clothing brand was one of the few to actually employ Americans, having a factory in Los Angeles. But it had a lot of problems in recent years and even ousted its founder. American Apparel also twice filed for bankruptcy, the second time coming last November.
USA Today reports that American Apparel is letting go of 2,400 employees. The firings come just a week after Canadian manufacturer of branded clothing Gildan Activewear acquired the company in a bankruptcy auction for $88 million. But Gildan did not agree to buy American Apparel’s 110 stores. It only acquired the rights to the brand name and the clothing designs.
American Apparel’s factory in Garden Grove, California was sold to a division of Broncs Inc. The company stated that the sale saved 300 local jobs.
— American Apparel (@americanapparel) January 19, 2017
So what will happen to the American Apparel stores? Well according to Business Insider, they will remain open for at least another three months. American Apparel spokeswoman Arielle Patrick told the publication that under the terms of its sale to Gildan there is a 100 day license agreement for the stores to continue to market the clothing line.
Gildan spokesman Garry Bell told Bloomberg that it never planned on buying the American Apparel’s stores saying, “We’ve never been in a position to be able to assume operations. We’re not buying an ongoing concern.”
As for Dov Charney, he is not happy with what is being done to the company which he created. Charney told the New York Post, “They are completely dismantling the company to zero.”
American Apparel was founded in 1998 by Dov Charney, the son of architect Morris Charney and artist Sylvia Safdie, sister of architect Moshe Safdie. The company has been known for its racy ad campaigns which feature scantily clad women who look under age.
— American Apparel (@americanapparel) January 12, 2017