American fashion chain American Apparel once again filed for Chapter 11, while it sold its brand rights to Canadian clothing company Gildan Activewear.
Uncertainty about stores’ future
Gildan pays 66 million dollars (61 million euro) for the brand rights, but will not acquire any of its stores, which leaves the store network’s future in limbo. However, Gildan will buy the brand’s clothing and sell its products across its North American distribution network.
American Apparel – with about 250 stores worldwide, half of those in the United States – has been in financial troubled water for years. It filed for bankruptcy in February 2016 and opted for a new strategy, but it showed no signs of improvements. That has now prompted the company to file for Chapter 11 once more.
American Apparel’s major issues started back when its founder, Dov Charney, was still in charge and continued after he was fired in 2014 following several scandals. His successor, Paula Schneider, quit in September.
