Canadian apparel maker Gildan Activewear recently won a bankruptcy auction for U.S. fashion retailer American Apparel after offering a bid of nearly $88 million.
A source close to the mater told Fortune that Gildan will not take any of American Apparel’s stores but instead will own the company’s brand and take over its manufacturing operations.
The purchase of American Apparel by Gildan will essentially be an end of an era for the Los Angeles-based company, which has been around since 1998. But the move is really no surprise, as the brand has been in the midst of seeking a buyer since late last year.
In September, Retail Dive, sourcing Los Angeles Times, stated that the firm had seen a number of management changes, most visibly as CEO Paula Schneider stepped down in Oct. 2016. The company’s decision to sell came after its emergence from bankruptcy in 2015 came rather quickly, Lloyd Greif, chief executive officer of investment banking outfit Greif & Co., told L.A. Times.
Retail Dive noted in its own analysis that “fast fashion, changing consumer tastes and priorities and fatigue around American Apparel’s highly sexualized marketing have taken a toll on the retailer” and that turnaround efforts never took root.
Neither American Apparel nor Gildan provided comment on Fortune’s report, but the confidential source said the bankruptcy auction attracted the attention of apparel maker Next Level Apparel, eCommerce giant Amazon and competitor Forever 21.
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