Clothing retailer, American Apparel, has had a tough few years. In 2014, the company severed ties with its founder and controversial CEO, Dove Charney, after allegations of “misconduct and violations of company policy”. The following year, American Apparel formally filed for bankruptcy, after failing to profit since 2009. Since its first protection, the racy LLC has competed with online shopping, and hoped to turn a financial corner under new execs. Unfortunately for the brand, it was unable to recover $200 million in losses over 2015, and has once again filed for bankruptcy.
This time around, American Apparel has sold off its assets to Canadian activewear company, Gildan, for a sum of $66 million. The new partnership sees Gildan acquire American Apparel’s branding , while the latter maintains its store and certain manufacturing assets. In an employee letter acquired by Reuters, Apparel chairman, Bradley Scher, simplified the new joint venture. “Gildan has asked for the opportunity to maintain certain of our manufacturing, distribution and warehouse operations in and around Los Angeles”.
According to reports from the Business News Network, American Apparel was shopping for a buyer originally, and looks to continue its daily operations as is. This is yet another youth-oriented clothing retailer, that has filed for bankruptcy. In the last two years, at least eight major retailers have had similar fates, including Aeropostale, Pac Sun, Wet Seal, and Quicksilver.