Online retailer Amazon.com Inc., Seattle; teen apparel store chain Forever 21 Inc., Los Angeles; Next Level Apparel, Gardena, Calif.; and consumer brand licensor Authentic Brands Group, New York, are all weighing offers to acquire American Apparel, Los Angeles, according to recent media reports.
American Apparel’s bankruptcy auction will determine the future of the company’s manufacturing plant in California, one of the most expensive U.S. states in terms of labor costs, according to a Reuters report.
Amazon, Forever 21, Next Level Apparel and Authentic Brands Group are in talks with American Apparel and its financial advisers about submitting offers, according to the report.
Any successful offer must top a $66 million stalking horse bid by Gildan Activewear, Montreal, which American Apparel agreed to when it filed for bankruptcy in November. Gildan’s offer included keeping American Apparel’s manufacturing plants in southern California, which employ about 3,500 workers.
But Gildan plans to preserve only some of the California production should its bid prevail, according to anonymous sources cited by Reuters. Many of Gildan’s production facilities are in low-cost countries.
Amazon’s acquisition of American Apparel is particularly interesting because it would represent the e-commerce company’s major foray into branded fashion and apparel. The company launched private-label brands last year.
The auction’s outcome is expected next week. — J.L.
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