Thousands of American Apparel jobs that could have been eliminated next month are safe for now.
The company’s head of human resources Craig Simmons told workers in a letter sent out Tuesday that American Apparel no longer expects to make cuts, the prospects of which had been raised in a notice sent to workers and in a warning filed to the California’s Employment Development Department early last month. American Apparel had, at that time, notified the state of 3,457 possible job cuts to be made Jan. 7 across its Los Angeles, Garden Grove and South Gate facilities. Those are no longer anticipated, Tuesday’s notice said.
“After this date [Jan. 7], we will have more clarity on the go-forward plan, depending on which buyer or buyers succeed, and how they wish to move forward,” Simmons said in his letter.
The update to the company’s workforce resulted from a “real interest in the facilities” that has emerged since prospective bidders have toured the buildings in more recent weeks, an American Apparel spokeswoman said.
Simmons reiterated the company’s ongoing talks with “potential purchasers” in his letter.
These include the Canadian T-shirt and basics firm Gildan Activewear Inc., which emerged with a potential offer of $66 million for American Apparel’s intellectual property and some of its assets. The deal excludes the American Apparel retail stores in the U.S. The offer makes Gildan the stalking horse bidder in the company’s bankruptcy auction scheduled for next month.
Color Image Apparel Inc.—parent of the fast-growing Alo Yoga, Bella + Canvas and the Bella Luxx brands—has more recently emerged as another bidder for the business. The company, with its own manufacturing facility in the city of Commerce and a workforce last reported to WWD in April by co-owner Danny Harris of about 800, is solely owned by Harris and Marco DeGeorge, who have known each other since high school.
Color Image, which had attempted to look at American Apparel’s books in the summer, has an interest in the business akin to Gildan’s, meaning a focus more on the manufacturing component, according to attorneys for the company. However, they would consider partnering with another party that has interest in the retail business.