Gildan Activewear Wins American Apparel Bid
Gildan Activewear, Montreal, has won the bid for Los Angeles-based American Apparel. Though other contenders, including Amazon and Forever 21, joined the race for bankrupt American Apparel, Reuters reported that Gildan Activewear successfully acquired the company for $88 million in a cash deal.
Gildan Activewear will acquire the intellectual property rights for the American Apparel brand and certain manufacturing equipment, but declined to purchase the company's retail outlets.
Analysts from Raymond James told Reuters that with Gildan Activewear holding a large stake in the basics sector of promotional apparel, this opens up opportunities for others to pursue options in fashion and activewear.
As of market's closing on Monday, Gildan Activewear stock had dropped 11 percent over the last year, but bumped up 3 percent as a result of this acquisition, making it its biggest intraday percentage increase in about two months.
The deal is subject to approval in bankruptcy court on Thursday, and we'll continue to follow this ongoing story as it develops.