MONTREAL — Gildan Activewear Inc. says it will pay US$88 million to buy the American Apparel brand as part of bankruptcy court proceedings for the California-based clothing company.
The deal announced Tuesday, which is US$22 million higher than Gildan's original offer in November, would see the Montreal-based company acquire American Apparel's intellectual property rights and certain manufacturing equipment. It doesn't include American Apparel's stores.
"We are excited to be moving forward with this acquisition,'' Gildan president and CEO Glenn Chamandy said in a news release.
An American Apparel store at the Lincoln Road Mall in Miami Beach, Florida March 17, 2016. Montreal-based Gildan Activewear has agreed to buy the brand for US$88 million. (Photo: Reuters/Carlo Allegri)
The acquisition is subject to court approval scheduled for Thursday.
Gildan said it plans to integrate the American Apparel brand into its printwear business. Further details are to be discussed in February when Gildan issues its next financial report.
The company makes and distributes T-shirts, underwear, socks and other clothing under various labels including Gildan.
American Apparel founder Dov Charney was fired in 2014 for allegedly violating secual harassment policy. (Photo: Getty Images)
American Apparel also has a Montreal connection. Founder Dov Charney started the business there and helped it become a publicly traded retailer and manufacturer known for its sexually provocative advertising.
American Apparel fired Charney in 2014 for allegedly violating its sexual harassment policy. Charney has denied the sexual harassment charges and claimed the company was taken from him in a ``coup.''
Charney's campaign to retake control of the company was rejected in January 2016 by a U.S. bankruptcy court judge.