American Apparel

A judge gave the nod Monday to American Apparel LLC’s retail closure plans.

The Los Angeles T-shirt firm may proceed with liquidation sales and then the shuttering of nine stores, which were earlier identified as doors that have historically had lower profitability and more recent poor performance. American Apparel continues to search for a buyer on some or all of its remaining stores. The judge on Monday also approved a liquidation plan and agreement with Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC as it relates to any future store closings and liquidation of inventory at those locations.

The company told a judge earlier this month it is optimistic a retail suitor will emerge, but the likelihood of one coming forward at its bankruptcy auction next month to purchase all 107 doors is unlikely.

The nine stores approved for closure are on M Street in Washington D.C.; Church Street in Evanston, Ill.; 6th Avenue in Seattle; Around Lenox Road in Atlanta; Central Expressway in Dallas; Main Street in Memphis; Pacific Avenue in Santa Cruz, Calif.; Broadway in New York, and Cherry Street in Burlington, Vt.

The company expects to bring in about $600,000 in gross sales from this initial round of closures, which are estimated to be completed by year’s end. Additional store closures are expected be completed by the end of April, according to court documents.

American Apparel in November filed for its second bankruptcy in less than a year, following a failed turnaround attempted after the firing of founder and former chief executive officer Dov Charney in late 2014. The second bankruptcy came with the announcement it had found a buyer in Gildan Activewear Inc., which offered $66 million for the company’s intellectual property and potentially some of its manufacturing assets. Gildan’s offer will serve as the stalking horse bid at next month’s auction.