American clothing manufacturer and retailer American Apparel, famous for their NSFW ad campaigns that some critics call sexist and degrading, is going out of business. The company, who filed for bankruptcy for the second time last year, with a reported $177 million in debt and no plan to turn it around, were purchased at auction by Canadian activewear company Gildan for $88 million cash. It has since been reported that all of American Apparel’s 110 retail locations would close. Gildan purchased intellectual property for the company and some manufacturing equipment but did not take on any of the company’s leases, including those for it’s all-North American based manufacturing facilities.
American Apparel says their facility was “the largest sewing facility in North America,” and were proud to say they were among the few retailers in the US that manufacture their own clothes. The referred to their manufacturing policies as “sweatshop-free,” and made a point of sharing with the world how much they paid their workers, about $30,000 USD per year plus benefits for an experienced worker. The company states on their website that a clothing manufacturer in Bangladesh makes something in the range of $600 per year. Bangladesh is a popular manufacturing location because of the considerably lower cost to retailers, however there have been several deadly incidents reported in the area in recent years, including the collapse of the Rana Plaza garment factories in 2013 which killed over 1100 people.
Reuters reports that nearly 90 per cent of Gildan’s 42,000 employees are located in low-cost Caribbean and Central American countries.
Garry Bell, a spokesman for Gildan, told Reuters that the company has not yet decided where to manufacture American Apparel clothing and will decide after the completion of an integration plan. Gildan will keep American Apparel stores open for the next 100 days until they decide how to distribute clothing to customers.