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American Apparel Bought out By Montreal Gildan Activewear Congrats!
A new start for a Canadian Company , Congrats! As one company fails another celebrates.
Is Fashion more expensive than the clothiers?
In this case yes. It looks like Fashion proves to be more expensive when a clothing maker company buys one out. Once again like so many other Big Giant Retailers, like Target Canada, American Apparel closed its doors at the beginning of the year.
Retailers American Apparel will be closing its doors as it was bought out by Montreal Clothing Maker Canadian Brand Gildan Activewear (GIL).
On January 10, 2017 Cbc news said that the $88 million dollar auction buy of American Apparel will not include the retail assets. So it is not clear what exactly Gildan Activewear will be buying. The reuters did however report that:
Gildan said on Tuesday it will buy manufacturing equipment and intellectual property rights related to American Apparel, but the Canadian company did not assume the leases of the retailer's California manufacturing plants, fueling questions over where the clothing will be produced.
Looks like the month of April will be the set date that the American Giant will close the last door of the 110. At some point its most stores American Apparel company owned had been 230 in the US. It looks like opening too many stores in a short period may not be the best strategy. The fallout is not directly pointed to one direction; however, rumors proved to be correct about a year and a half ago when the :
American Apparel’s board of directors, CEO Paula Schneider stepped down from her position in September 2015.
It was a hot mess when the founder of American Apparel Dov Charney, founder of American Apparel, had sexual harassment allegations.
On twitter Teen Vogue twitted that 3500 American Apparel will loose their jobs.
Soon Enough as the news hit the internet it was being the street reported that "Shares of Gildan were up nearly 1% pre-market after winning the American Apparel brand for $88 million in cash... Shares of the Canadian company were up almost 1% at $25.50 in pre-market trading on Tuesday."
Guggenheim Securities, LLC is acting as Gildan's financial adviser, and Sullivan and Cromwell LLP is acting as legal adviser.
Read More AboutAmerican Apparel might not be American much longer. https://t.co/gNmBFgdRxr— Moments Canada (@CanadaMoments) January 10, 2017