American Apparel, Los Angeles, has reportedly started laying off staff today after Gildan Activewear, Montreal, decided not to buy some of the bankrupt company’s retail assets, Reuters reported.
A source close to American Apparel told Reuters that many of the more than 2,000 employees at American Apparel’s Los Angeles headquarters and more than 900 employees in the South Gate manufacturing facility could lose their jobs.
This isn’t a complete shock to American Apparel employees. The writing had been on the wall for a while.
“The company issued a WARN Act notice several months ago, letting employees know that, depending on the buyer of the business, a sale could result in eventual shrinkage of some business areas,” American Apparel said in a statement. “The company is pleased that it was able to secure a second agreement with Broncs, which plans to save over 300 jobs then they take over the Garden Grove facility.”
This move confirms what we thought would happen to American Apparel’s retail stores. Following the closure of basically all of its U.K. storefronts, American Apparel will close all 110 stores by the end of April, The Huffington Post reported.
“This was always about buying assets out of bankruptcy,” Garry Bell, vice president of corporate marketing for Gildan Activewear, told The Huffington Post. “The reality is this wasn’t a purchase of an ongoing concern.”
Bell hinted at this outcome when we spoke to him after the news of the acquisition first broke.
