Gildan has today announced that it has entered into an asset purchase agreement to acquire the worldwide intellectual property rights related to the American Apparel brand.
The purchase of the wholesale brand is expected to cost around $66 million. Gildan will also separately purchase stock from American Apparel to ensure a seamless supply of goods into the printwear market, while the brand integrates into its printwear business.
Gildan will not be purchasing any retail store assets.
American Apparel voluntarily filed for Chapter 11 bankruptcy protection today and therefore, the closing of this deal is subject to approval by the bankruptcy process and customary conditions, and is expected to be completed in early 2017.
The acquisition of the well-known American Apparel brand would represent a strong complimentary addition to the company’s portfolio of brands. It would create revenue growth opportunities by leveraging Gildan’s extensive distribution network in the North American and international printwear markets to further increase the brand’s penetration in the faster growing fashion basics segments of these markets.
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. Completion of the acquisition would be subject to Gildan being selected as the successful bidder in any such auction.