Bidders Line Up for American Apparel
As the deadline looms for buyers to submit their bids for bankrupt American Apparel, rumors are flying about who is thinking about making an offer.
According to a Reuters news story, Forever 21, Authentic Brands and Amazon.com are throwing their hats into the rings.
Other potential buyers mentioned have been Color Apparel Inc., the Los Angeles parent company of T-shirt label Bella + Canvas, and Gardena, Calif.–based blanks maker Next Level Apparel.
Bids are due Jan. 6 for a hearing and auction in U.S. Bankruptcy Court in Delaware that are scheduled to take place Jan. 9 and Jan. 12.
Many see Amazon.com as a natural buyer because it has said it plans to boost its revenues by selling more apparel and groceries in the future. Amazon.com acquired online shoe vendor Zappos.com in 2009 for $1.2 billion.
Canadian apparel maker Gildan Activewear put in place a $66 million offer last November to buy American Apparel’s intellectual-property assets as well as its wholesale merchandise, but it said it was not interested in the nearly 100 American Apparel stores in the United States. Those could be sold separately to another buyer. Gildan Activewear is considered the stalking horse bidder but could be outbid by other entities.
It was still unclear whether Gildan, if it became the buyer, would continue manufacturing at American Apparel’s factory near downtown Los Angeles and its other two manufacturing sites that employ about 3,500 people.
For years, American Apparel has struggled to make a profit and fell on harder times after its founder and chief executive, Dov Charney, left at the end of 2014.
In early 2015, the CEO position was turned over to Paula Schneider, who 10 months later led the company into its first bankruptcy in October. The company emerged from bankruptcy in February 2016. Schneider left the company in the fall of 2016, and a month later American Apparel was back in bankruptcy court with a Chapter 11 petition.
The company listed about $215 million in debts. Net sales in 2015 were $497 million.
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