Fate Of American Apparel Stores Remains Unclear After Bankruptcy Auction

Image courtesy of Michael Kalus

Last week, Canada’s Gildan Activewear purchased the American Apparel brand, but not the company’s retail locations, leading to reports that all 110 stores would be shuttered. Yet, what remains of American Apparel won’t confirm those closures — for the moment.

Without a buyer for American’s retail business, the shops are destined to close. However, that wouldn’t happen for at least another three months under a 100-day license with Gildan, an American Apparel spokeswoman told Business Insider. No stores have closed since the nine that were announced in October, she added.

When the liquidation of those stores was approved in December, The Wall Street Journal reported that any other stores not sold in the auction would be liquidated by the same liquidators, Merchant Resources LLC and Gordon Brothers Retail Partners LLC, by April 30, 2017. That would line up with the 100-day license deadline.

For the time being, American Apparel and Gildan both declined to comment further to Business Insider on what will happen after the license expires.

Closing all stores would mean laying off about 2,000 employees. An earlier report this week indicated that layoffs have already started for workers at the company’s Southern California headquarters and nearby factories. Although at one point American Apparel said layoffs at those locations weren’t certain because Gildan was considering buying some manufacturing operations, the Canadian apparel company apparently changed its mind.

There’s some good news for some employees, however, as American Apparel says it secured a separate agreement with a textile manufacturer called Broncs, which plans to save more than 300 jobs eventually.