Gildan Acquisition Of American Apparel For $88 Million

According to the world clothing shoes and hats net, Canada

The auction of Gildan Activewear group (GIL.TO) will raise the bid amount to $88 million at the bidding meeting held on Monday, which will successfully apply for the two bankruptcy filing in the United States in 2016.

American Apparel is under its banner.

As of press release,

Neither group nor Gildan group commented on the details of the auction.

Some analysts say that the successful acquisition of American Apparel by Gildan group means the end of a popular culture in the American manufacturing era.

Gildan group is headquartered in Montreal, Canada. Besides its foundries, it also has its own brands, such as Gildan, Gold Toe and Anvil. It has more than 40 thousand employees worldwide, and its market value is about $7 billion.

According to the world clothing and shoe net, after the completion of the paction, Gildan group will not change the total 110 stores structure in the United States, but has obtained the right to use the brand trademark and share the brand part of the production business.

Gildan has acquired the brand ownership of the California garment factory in the United States through the acquisition, while the next 90% of the American Apparel clothing will be produced in lower cost areas, such as North Carolina and Georgia, with textile and distribution centers.

Prior to the Gildan group marketing and marketing Deputy Zhuxi Garry Bell has said that it will not keep all the products made in the United States.

According to the world clothing and shoe net, in response to the new president Trump's call for "making the manufacturing industry return to the United States", the number of enterprises intending to bid for American Apparel increased to 4 last week, except for Gildan group, namely, California garment manufacturers Next Level Apparel, Amazon (AMZN.O), Forever 21 and brand management company Authentic Forever (HEX).

Gildan group, as the stalking horse auctions, initially quoted a price of $66 million.

The offer includes the acquisition of brand intellectual property and the price of some potential manufacturing assets, and 3500 employees in southern California must be guaranteed not to be dismissed.

Any retailer who wants to sell American Apparel's income pocket needs more than this price.

Fake horse race auction means a bankrupt company chooses an interested company to set a minimum bid price.

In this way, other potential bidders can not make acquisitions below this price.

In November of this year, American Apparel stopped sending products to brand stores in the UK, Australia and Canada, and sold the remaining 13 stores in the UK to KMCP for sale and decided to withdraw from the UK market.

In the same week, the judge of the bankruptcy court ordered American Apparel to pay $2 million 30 thousand to the FTI consulting firm within 30 days, and to pay $1 million 250 thousand to the unsecured creditors Committee.

American Apparel, which is famous for its full suggestive advertising, was founded in 1986 by Dov Charney in the United States. At the peak of its brand, American Apparel has a market capitalization of more than 500 million US dollars and has a turnover of more than 600 million US dollars, but now its brand income has been severely reduced, and it has fallen into too much inventory surplus and inefficient corporate quagmire. The company began to lose money in 2009, and the American Apparel in last fiscal year recorded a loss of up to 75 million dollars.

The company tried to pform the sexy clothing style from Dov Charney in power, because the stock price was lower than a dollar for a long time, and American Apparel was eliminated by the NYSE in November 6, 2015.

Only 6 months after American Apparel first declared bankruptcy, the founder and chief executive, Dov Charney, finally decided to step down because they could not reverse the company's losses.

At present, various public information shows that American Apparel is heavily indebted and its selling price is shrinking.

In October last year, American Apparel CEOPaula Schneider, who took office for only 2 years, announced her resignation. In the past year, she failed to save the deteriorating performance and filed bankruptcy protection for American Apparel for the second time.

American Apparel has been strongly sought after by young consumers at that time. But in recent years, the youth clothing retailing in the United States has been severely damaged by the booming electricity suppliers and fast fashion, especially H&M and Zara, and gradually lost market share.

Since last year, at least eight young clothing retailers have filed for bankruptcy under brutal competition and sales stagnation, including Aeropostale Inc, Pacific Sunwear of California Inc, The Wet Seal Inc..

At the end of December, the last two stores in American Apparel were completely shut down in China, indicating that American Apparel will completely withdraw from the Chinese market.

According to the bankruptcy court, brand sales fell to $497 million in 2015.

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