American Apparel denies immediate store closures
The American Apparel bankruptcy saga is far from over. Canadian manufacturer Gildan purchased the ailing retailer on auction for $88 million and American Apparel reportedly began shuttering its stores, according to the American press. A spokesperson for the retailer refuted those claims with Business Insider.
Arielle Patrick, the American Apparel spokeswoman, said that the stores will not be shut down for another three months due to a 100-day license with Gildan. “The company hasn't shut down any stores since the nine closures it announced in October,” she added.
Gildan spokesperson Garry Bell told Bloomberg that the company had no intention of acquiring American Apparel stores. The $88 million deal did not include the retailer’s 110 stores.
"We’ve never been in a position to be able to assume operations," Bell added. "We’re not buying an ongoing concern."
If American Apparel fails to find a buyer for its stores, it will have to shut down its locations.
The former California-based retailer filed for its second bankruptcy in fall 2016 after it failed to turn its business around following its chapter 11 bankruptcy in 2015. Former American Apparel CEO Paula Schneider, who joined the company before the chapter 11, parted ways with the company for Delta Galil just one month prior to the second bankruptcy filing.
Gildan was one of many companies interested in acquiring American Apparel after the retailer’s second bankruptcy in 2016, and Reuters reported that its deal would not include the 110 American Apparel retail locations.
According to the American press, American Apparel began its layoff process on Monday firing up to 2,400 workers in Southern California.
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