American Apparel Bought By Canadian Company

A Montreal company, Gildan Activewear Inc., is buying the Los Angeles, California-based American Apparel Company.They will pay US$88 million as part of bankruptcy court proceedings for manufacturing equipment and intellectual property rights. They will not buy any stores, however.

American Apparel Bought By Canadian Company

American Apparel Storefront

The offer happens to be $22 million higher than Gildan’s original offer last November, says the Canadian Press, and pends court approval on Thursday. Gildan makes and distributes T-shirts, underwear, socks and other clothing and intends to incorporate the American Apparel brand into its printwear business.

American Apparel’s past is marred by sexual harassment charges directed at its founder Dov Charney, also Canadian, who started the business in Montreal and who has brought it to its publicly traded retailer and manufacturer status. He also is responsible for giving the company its sexually-charged slant in its signature, provocative T-shirt and underwear advertising. Charney has, however, denied the charges, claiming the company was removed from his control in “a coup.”

Despite the fact that Dov Charney has been blamed as part of the reason for the demise of American Apparel, it can’t be denied that his innovation has also been the life blood of the company. Starting up in the early 90s with borrowed money from his parents, Charney dropped out of Massachusett’s Tufts University to tend to his new clothing business.

He also made waves and got noticed when he began to confront the labor standards of the local garment industry by offering higher wages and benefits to his workers, promising to target exploitation in the garment manufacturing world.

From American Apparel’s beginnings, Dov Charney used sexually bold advertising to propel sales and as a result significantly shaped the brand’s image. But over time, American Apparel’s fast retail expansion (in 2010 there were 273 retail stores), and subsequent cash shortfall, along with the harassment charges, brought about the popular company’s downfall.

Dov Charney attempted to retake control of the company back in January 2016 but was denied by the US bankruptcy court.

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