Gildan Activewear is taking over a major U.S. retailer.
The T-shirt company announced Monday that it had signed an asset purchase agreement (APA) to acquire American Apparel’s assets and worldwide intellectual property rights for approximately $66 million—the same day the Los Angeles-based brand filed for Chapter 11 for the second time in little more than a year.
Gildan will purchase American Apparel inventory separately, as the company prepares to incorporate the brand into its printwear business.
According to Gildan, American Apparel would be a strong addition to its diverse brand portfolio. The acquisition will foster revenue growth and enable Gildan to boost its distribution network in North American and international printwear markets. In addition, American Apparel will provide Gildan the opportunity to sell its branded apparel products to a new consumer demographic.
The acquisition came on the heels of American Apparel hiring investment bank Houlihan Lokey Inc. in August to start a confidential sale process, after the company emerged from Chapter 11 bankruptcy in February. Last month, several licensors, including Authentic Brands Group LLC and Iconix Brand Group Inc., expressed interest in acquiring American Apparel. On Wednesday, the retailer reportedly re-engaged talks with Sequential Brands Group LLC, after its negotiations with ABG ended.
American Apparel is also experiencing issues overseas. The company entered into administration in the U.K. last Tuesday, which put 13 stores and their employees at risk. The next day, Ireland’s High Court appointed a provisional liquidator to American Apparel’s Dublin city center store.