American Apparel Acquired by Gildan Activewear
After weeks of speculation, Gildan Activewear has garnered the winning bid in a bankruptcy auction to acquire the American Apparel brand and certain assets for $88 million.
The Canadian T-shirt and activewear maker announced in a Jan. 10 press release that its bid would be subject to U.S. bankruptcy court approval on Jan. 12.
The company’s cash bid includes the acquisition of certain American Apparel manufacturing equipment, as well as an agreement to purchase inventory from American Apparel to “ensure a seamless supply of goods to the print-wear market."
Gildan will not be buying the nearly 100 American Apparel stores owned by the Los Angeles company, which filed for Chapter 11 bankruptcy protection for a second time on Nov. 14.
Gildan was the first company to bid for certain American Apparel assets just days after the bankruptcy was filed. Its initial offer was $66 million, which made it the stalking-horse bidder.
That opened up an auction for other companies to make bids. Reports had Amazon.com, Forever 21, Authentic Brands and Next Level Apparel taking a look at the company. But Gildan got busy and upped its ultimate bid by 33 percent.
“We are excited to be moving forward with this acquisition. The American Apparel brand will be a strong complementary addition to our growing brand portfolio. We see strong potential to grow American Apparel sales by leveraging our extensive print-wear distribution networks in North America and internationally to drive further market share penetration in the fashion basics segment of these markets.” said Glenn Chamandy, president and chief executive of Gildan, whose other brands include Alstyle Apparel, Anvil, Golden Toe and Peds.
The company will provide details on the acquisition’s projected financial contribution when Gildan files its full-year earnings results in February.
Guggenheim Securities, LLC is acting as Gildan’s financial advisor for the transaction and Sullivan and Cromwell LLP is acting as legal advisor.