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Gildan Acquires American Apparel

What does this mean for our merch??

American Apparel Store Photo: Victoria Jones/Getty Images

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Wholesale apparel company Gildan has won the bankruptcy auction for the beleaguered American Apparel, Reuters reports. The news ends the dreams of those who had hyped themselves up on possible alternative players in this deal — namely behemoth e-tailer Amazon dot com.

The possibilities were there for Amazon to start cranking out supple made-in-the-US basics and have them out to you same-day, Forbes wrote. Bloomberg even suggested that Amazon CEO Jeff Bezos should go ahead with the deal just to get back on President-elect Donald Trump’s good side. But that all fell apart last night when Gildan, faced with competition not only from Amazon but reportedly Forever 21, Next Level Apparel, and Juicy Couture owner Authentic Brands Group, upped its bid to $88 million.

That doesn’t mean American Apparel stores will necessarily stay open. The Gildan acquisition doesn’t include the brand’s 110 remaining stores. If the sale goes through (an American Apparel representative tells Racked the deal will need to be approved at a January 12th hearing and will likely not finalize until the end of the month, at the earliest), American Apparel will need to find a separate buyer to take over the stores in order for them to remain open.

But Gildan will now be in control of American Apparel’s manufacturing operations, which are famously located in the US. While publications breathlessly blogged about what a potential Amazon-American Apparel merger could look like, the deal for Gildan is particularly interesting because it currently makes close to 90 percent of its garments offshore in the Caribbean and Central America.

American Apparel controls one of the largest American manufacturing operations in the US, which means Gildan could potentially respond to trends or big-name customer requests more quickly. The latter is especially important considering high-profile merch movers like Kanye West and Justin Bieber used Gildan apparel for their items. (If only this deal had happened before the merch boom; maybe we could have been wearing actually comfortable overpriced graphic tees.)

Moreover, in the push for more eco-friendly and ethically made clothing — even fast-fashion retailers like H&M and Zara tout their sustainability efforts nowadays — Gildan may be making an appeal to a conscious consumer base that’s only getting larger. American Apparel has long dealt with the specter of its controversial founder and ousted CEO Dov Charney, who was accused of sexual assault on multiple occasions, but its made-in-America credentials were never questioned.

With a fresh start, American Apparel might help Gildan win wholesale clients hoping to attract a growing customer base who cares about where and how their T-shirt was made. Oh, and how soft it is.

And in the meantime, American Apparel just got another lifeline — at least for now.