Let’s talk about the big elephant in the room – the current state of American Apparel. The company is undergoing serious changes that affect the entire industry. But there are a lot of rumors, chatter and hearsay, so let’s look at all the facts we know so far.
First things first: what exactly happened to American Apparel?
American Apparel (AA) is an instantly recognizable brand, but it has struggled for some time. It hasn’t been profitable since 2009 and it filed for bankruptcy for the first time back in 2015. After some restructuring, American Apparel continued operations for a while, but it filed for a second bankruptcy a little over a year later in November 2016.
In early January 2017, the Canadian apparel maker Gildan Activewear acquired American Apparel in a bankruptcy auction with a bid worth around $88 million. Gildan bought American Apparel’s manufacturing equipment and intellectual property rights, but it chose not to assume the leases of AA’s factories and distribution center in California. The deal also didn’t include American Apparel’s retail stores, which will be closed this year.
Where will American Apparel’s goods be manufactured in the future?
In short, no one really knows right now. At the time of purchase, Gildan hadn’t decided what to do with the manufacturing part of the American Apparel business – they said they’ll lay out more concrete plans for AA’s future at the end of February.
One of the main questions on everyone’s lips is: will Gildan keep manufacturing American Apparel products in the USA? The Canadian company mostly produces its goods in the Caribbean and Central America. It has some manufacturing plants in the USA, but the only article of finished clothing produced there is socks. Gildan hasn’t ruled out the possibility that it’ll keep American Apparel production in the USA, but no decisions have been announced publicly yet. We’ve heard through the grapevine that Gildan might keep manufacturing some of AA’s more popular products in the US, but the production would move away from California.
Gildan reportedly beat companies like Next Level Apparel, Amazon and Forever 21 in the bankruptcy auction with its $88-million bid. The high bid suggests that Gildan sees value in the American Apparel brand and has plans for it, but we’ll just have to wait and see what exactly the Canadian company decides to do.
What does all of this mean for our customers?
When an industry leader like American Apparel experiences problems, they impact everyone. At the moment, there is some stock of American Apparel products still available, but it’s limited and will run out unless Gildan resumes production of AA items in the coming weeks.
From what we’ve heard, production of AA products should resume at some point, but it’s not clear where and when exactly it’ll happen. It might take a couple of weeks, but it could also be a question of months.
We will offer comparable alternatives for American Apparel products among other brands which are also made in the USA. We hope to have all products in the store switched over within a week, until this is done you might see out of stock on some products and we apologize for that. We will be working diligently until this is complete. As always we love our customers and just ask that you bare with us as we are going thru this phase. Thanks so much and have a wonderful weekend!!