Images Magazine December 2016

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the US. The conversation with American Apparel began before the
US presidential election results were known, reports Garry, but there
has been a movement within the US for some time for retailers to
commit to purchasing more ‘Made in the US’ products. “Walmart has
likely been the most vocal with their programme looking to source
$250 billion worth of products over a fixed period of time with ‘Made
in the USA’ origins. Gildan has invested heavily in US manufacturing,
with more than $400 million invested in the last three years in yarn
spinning,” explained Garry. “In terms of possible future changes to our
manufacturing model, it remains very early in the proposed acquisition
process and likely also early in the socio-political situation in the US to
comment.”
As part of the agreement, Gildan Activewear has made a commit-
ment above and beyond the $66 million to purchase inventory from
American Apparel. Gildan Activewear has also asked the company
to continue to produce printwear products specifically to ensure that
there is a continuation of supply. “As of right now, it’s business as
usual from what we understand with the US business,” said Garry,
adding, “We’re not in a position to be able to comment on what they
do during the bankruptcy process. Our intent, as with every one of the
acquisitions that we do, is understanding that the printwear business
is very much reliant upon a continuity of supply and availability of
inventory to fulfil orders quickly.” Images has asked American Apparel
what the situation is regarding wholesale stock in the UK during the
bankruptcy process, but there was no information available before the
magazine went to press.
“We’re excited about this, if we are deemed in fact to be the win-
ning bid,” said Garry. “We’re very pleased with adding this to our
portfolio of brands and we think there are good things coming for this
brand and for our customers around the world.”
w w
Gildan submits stalking horse
bid for American Apparel
Gildan Activewear has entered into an asset purchase agreement (known as a stalking horse bid) to acquire the
intellectual property rights related to the American Apparel brand and certain assets for a cash purchase price of
approximately $66 million dollars
Gildan’s move to acquire American Apparel follows American
Apparel voluntarily filing for Chapter 11 bankruptcy in the
US on 14 November 2016, with the brand’s UK business
having gone into administration on 8 November 2016. This
is the company’s second bankruptcy filing in 13 months.
The proposed agreement includes Gildan Activewear taking over the
leases on American Apparel’s distribution centre and two manufac-
turing centres in California. Notably, the company’s retail assets have
been left out of the bid.
Speaking to Images, Garry Bell, vice president of corporate marketing
and communications at Gildan Activewear, explained that premium-
priced fashion brand American Apparel is a good fit with Gildan
Activewear’s three printwear brands – Gildan, Anvil and Comfort
Colors. When asked whether there is room for both Anvil and Ameri-
can Apparel within the company, Garry – while pointing out that the
acquisition is not yet a done deal – said: “Our concept initially is that
there would be room for both because Anvil is not a premium-priced
fashion brand; Anvil’s an affordable fashion brand... whereas American
Apparel has a little bit more edge, it’s a bit more fashion forward. It
rounds out our portfolio of brands very well.
“We’re very confident in the brand, should we in fact be designated
the successful bidder, and that it fits very well into our printwear busi-
ness. We’re in 50 markets around the world so we can take this brand
and really expand it globally beyond where it is today. They have retail
stores in Japan, but they’re not selling in Japan. We are. They have
retail stores in China – they’re not selling their brand in the printwear
channel in China. We are selling Gildan in China. We’re in markets
all around the world selling products through the printwear channel
because that’s Gildan’s original business.”
A core part of the American Apparel brand is that it is made in the
US, so it is unlikely that its manufacture will be moved overseas, as
is the case with the other Gildan Activewear brands. However, given
the current political situation in the US where President-elect Trump
has been vocal about bringing industry back to the US and tearing up
trade deals, it could prove to be an astute move by Gildan Activewear
to acquire a company that has a ready-made manufacturing base in
”
American Apparel’s factory and distribution centre in downtown Los Angeles
IMAGES DECEMBER 2016 17
INDUSTRY ISSUES IS
It rounds out our portfolio of brands very
well
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