American Apparel Workers Get a Slight Reprieve

American Apparel workers might have a few more days to work at the huge factory in downtown Los Angeles and two other facilities.

In November, they were warned that their jobs might end on Jan. 7. But executives of the clothing company now say that an auction of American Apparel’s assets won’t be held until Jan. 9 and Jan. 12, giving the workforce a few more days of guaranteed employment.

In a letter sent to employees on Tuesday, Dec. 6, Human Resources Director Craig Simmons said that the anticipated auction and hearing for the manufacturing, wholesale and retail business will take place on those two days. “We will keep operating the business as usual until then, including having employees continue to come to work every day. We do not anticipate that there will be any employment terminations taking place on Jan. 7,” Simmons wrote. “After this date, we will have more clarity on the go-forward plan, depending on which buyer or buyers succeed and how they wish to move forward.”

American Apparel filed for Chapter 11 bankruptcy protection in mid-November, for the second time in 13 months, and received a $66 million bid from Gildan Activewear for the company’s intellectual-property rights and some wholesale inventory. It did not bid for the more than 100 U.S. American Apparel stores and did not indicate how much U.S. manufacturing of the label it would keep, if any.

With Gildan’s stalking-horse bid, other companies can come in and outbid the Canadian basics manufacturer or opt to take other parts of American Apparel.

In early November, American Apparel told the state Employment Development Department that there were possible plans to lay off nearly 3,500 workers by Jan. 6.