Gildan Activewear Wins Auction Buy Bankrupt American Apparel's Brand, Assets

Montreal-based Gildan Activewear Inc. said Tuesday it has won an auction to buy the brand and assets of bankrupt apparel seller American Apparel LLC for $88 million. If the deal is approved by the bankruptcy court on Jan. 12, Gildan expects the deal to close by early February. As part of the deal, Gildan will buy American Apparel's intellectual property rights and certain manufacturing equipment, and will separately buy certain inventory, but will not purchase any retail store assets. "We see strong potential to grow American Apparel sales by leveraging our extensive printwear distribution networks in North America and internationally to drive further market share penetration in the fashion basics segment of these markets," said Gildan Chief Executive Glenn Chamandy. Gildan's stock, which was still inactive in premarket trade, has lost 5.2% over the past 12 months, while the SPDR S&P Retail ETF has climbed 6.9% and the S&P 500 has run up 18%.