Last week we were covering the story on how Amazon and Forever 21 entered the ring to discuss the possibility of acquiring the beleaguered American Apparel. Well, it looks like their efforts did not pay up as Reuters reports that Canadian Wholesale apparel company Gildan has just won the bankruptcy auction for American Apparel.
While many industry insiders were tickled by the idea of Amazon acquiring AA, the competition from not only Amazon but Forever 21 as well kicked Gildan into action by upping their bid and finalizing the deal for $88 million a paltry sum considering the retail juggernaut at one point was almost worth $1 Billion.
What’s interesting about the deal is that the Gildan acquisition did not include the brand’s remaining 110 stores. The deal will likely go through at the end of the month, which means that American Apparel will need to find a separate buyer for the remaining stores.
This is a big win for Gildan who will now control all American Apparel manufacturing operations which means the company can start making more goods in North America (currently 90% of Gildan’s production is offshore in the Caribbean and Central America.)
Additionally, it can help Gildan acquire new wholesale customers – especially the ones that are concerned with clothing production off shores.