MONTREAL—Gildan wins a court-supervised auction to acquire the American Apparel brand and assets with a final cash bid of roughly $88 million. The transaction is subject to bankruptcy court approval on Jan. 12. Gildan expects to complete the acquisition by early Feb. 2017.
“We are excited to be moving forward with this acquisition,” says Glenn Chamandy, CEO of Gildan. “We see strong potential to grow American Apparel sales by leveraging our extensive printwear distribution networks in North America and internationally to drive further market share penetration in the fashion basics segment of these markets.”
The announcement comes as the latest development in Gildan’s progress toward an acquisition. In Nov. 2016, the company released details of an asset purchase agreement, and plans to acquire the global intellectual property rights of American Apparel.
As part of the asset purchase agreement, Gildan has since evaluated equipment at American Apparel facilities in California included in the original offer, and opted in on manufacturing equipment. However, the company currently will not assume the leases on these facilities, says Garry Bell, vice president of corporate marketing and communications at Gildan. Bell adds that while Gildan still has no plans to pursue the retail division of American Apparel, the company has employed a contingency plan for the interim.
"We've entered into a limited 100-day license with (American Apparel) to allow them to continue to operate their current retail stores as well as their e-commerce site," Bell explains.
Gildan says it will release final details of the financial contribution of the acquisition in Feb. 2017 in conjunction with the company’s full report of 2016 earnings.
As of Jan. 12, Gildan is officially approved by the bankruptcy court to move forward with its acquistion.
For more information, visit: www.gildan.com
Updated Jan. 13 9:30 a.m. to reflect approval of final bid by bankruptcy court.
Updated Jan. 10 at 4:00 p.m. MST with remarks from Garry Bell, vice president of corporate marketing and communications at Gildan.