DONE DEAL: Gildan Activewear Inc. on Wednesday confirmed the closing of its purchase of American Apparel’s intellectual property and some equipment.
The deal brings an end to what has been a dramatic saga for the Los Angeles T-shirt company that began with the ouster of founder and former chief executive officer Dov Charney in late 2014. The period following Charney’s final termination from the firm was fraught with tumult and included regular employee protests outside of headquarters and attempts by some workers to unionize, lawsuits between Charney and past executives and board members, mass layoffs, two chief executives and a pair of bankruptcies.
Gildan’s purchase price totaled $103 million, which includes $15 million in inventory purchase orders. The price represented a $22 million increase from Gildan’s original offer, which made it the stalking horse bidder in American Apparel’s January bankruptcy auction in which it went head to head with Next Level for a go at the company.
A bankruptcy court judge’s approval last month on the deal to Gildan signaled the wind-down of American Apparel, with none of the stores or facilities part of the Gildan transaction. Some 2,400 layoffs across departments were made at the company’s downtown Los Angeles factory a few days following the court approval. American Apparel, during the auction, also struck smaller deals that included one for its Garden Grove, Calif., knit and dye house, along with the buyback on leases of two of its stores.
It’s unclear what American Apparel, the brand, looks like moving forward under its new ownership or whether it would ever return to brick-and-mortar retail. Details are expected to come as early as Gildan’s next quarterly conference call, scheduled for Feb. 23.
The closing now puts American Apparel within a stable of Gildan-owned brands that includes its namesake line, Gold Toe, Anvil, Comfort Colors, Alstyle and Peds. Gildan also licenses the Under Armour brand to make socks distributed in the U.S. market.