Canada-based apparel manufacturer, Gildan Activewear Inc., has entered into an Asset Purchase Agreement (APA) to acquire the worldwide intellectual property rights related to the American Apparel brand and certain assets from American Apparel LLC, a US-based manufacturer of fashion basics, for a cash purchase price of approximately US $ 66 million. The closing of the transaction is however subject to approvals by the American Apparel bankruptcy process and customary conditions, and is expected to occur during the first quarter of 2017.
The move aims to create revenue for the company as American Apparel is a highly recognised brand among consumers within the north American printwear channel. Gildan will also separately purchase inventory from American Apparel to ensure a seamless supply of goods in the printwear channel while the company integrates the brand within its printwear business. However, Gildan will not be purchasing any retail store assets of American Apparel.
Also Read – American Apparel heading towards bankruptcy again!?
American Apparel today voluntarily filed for Chapter 11 Bankruptcy Protection. The Bankruptcy Court may require American Apparel to hold an auction for its assets and business under which the proposed acquisition would constitute the initial bid. Consummation of the acquisition would be subject to Gildan being selected as the successful bidder in any such auction and Bankruptcy Court approval.
