American Apparel declared bankruptcy and lays off 2.400 of its employees

Economy Nilgun Salim
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The dismantling of the American brand is speeding up firing nearly 2.400 of their employees.

American Apparel, a stylish, youth-oriented manufacturer that once featured about its cool outfits being manufactured in the United States, has battled in the past few years with substantial financial debt and a considerably more competitive and online-oriented fashion community.

The massive cuts, at its Los Angeles head offices and a manufacturing center situated in nearby South Gate, comes eight weeks after the brand declared bankruptcy protection.

A week ago, Gildan Activewear, a Canada-based fashion producer, got the green light to acquire some of American Apparel’s financial assets for approximately $88 million. The buy will hand Gildan the worldwide intellectual property privileges to the American Apparel company, as well as some of its manufacturing equipment and inventory.

Gildan, however, did not agree to buy American Apparel’s 110 stores. Expectations that Gildan might buy some of American Apparel’s manufacturing facilities also fell through.

American Apparel was able to put up for sale its center in Garden Grove, California to a department of Broncs Inc, which says it will provide the existing labour force, a move that will “save over 300 jobs,’’ reports American Apparel spokeswoman Arielle Patrick.

American Apparel shops will also remain accessible for the next couple of months. A constrained license from Gildan will encourage the U.S company to preserve its establishments operating, along with its internet site, for 100 days. Gildan will expose more facts about its incorporation of American Apparel in February, says Gildan spokeswoman Geneviève Gosselin.