American Apparel is known for it bold marketing and the variety of well made colorful clothing it sells. Earlier this week the popular retailer filed for bankruptcy again for the second time within about a year. In reaction to this, Gildan purchased the intellectual and property rights of the brand for nearly $100 million. Gildan is known for basic garments like cotton t-shirts. The company was interested in AA to add more of a fashion aspect to it’s business. The company has not made a profit since 2009 and continued to struggle when sexual harassment claims towards employees were made against the company’s former CEO, Dov Charney, as well as claims of him using the company’s money for his own personal matters. The failure to close enough stores during financial troubles also caused a decline in the well being of the company. American Apparel’s target audience was also stolen away by competitor’s Forever 21 and H&M who offer similar styles and are more affordable brands. The brand tried to appeal to older audiences, however this attempt was unsuccessful. AA filed for bankruptcy in October of 2015 and with the help of a financial plan, the brand was able to leave bankruptcy, however the plan was not successful and AA filed again in November of 2016. The sale of the brand had been speculated since the CEO position of the company had been passed from Paula Schneider to Chelsea Grayson. American Apparel was founded in 1989 by Dov Charney in his college dorm at Tufts University in Massachusetts. In 1997 the company made the move to Los Angeles. Even though the brand will continue to live on, this marks the end of American Apparel serving as a manufacturer. Gildan is not interested in any of the brand’s domestic and international stores and will no longer continue it’s operations in Los Angeles due to the increase in minimum wage. Gildan’s VP, Gary Bell said that they will keep the theme of “Made in America” since it is a key part of American Apparel’s branding. Other companies will have the opportunity to bid for partial ownership or control of American Apparel as well. Former CEO Dov Charney is even thinking about making an offer. Charney was highly upset about his removal from CEO as he feels he was forced out of his position and intends to take legal action.  AA employees were notified of the sell of the brand via mail and how it was vital to the brand’s survival. There is a possibly buy the inventory of it’s newly acquired company in order to integrate the two companies. American Apparel stores are due to close early on within 2017. If Gildan does not assume possession of the merchandise this will cause merchandise that was once considered upscale to end up being sold at other lower end stores like Target at a cheaper price. Anyone who is a fan of the brand should get to the nearest AA store to buy merchandise while they can, before every store’s door is closed forever.

About The Author

Fashion Major, University of Alabama, Chicago, Photography

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