American Apparel, which last week was acquired Gildan Activewear, began laying off about 2,400 employees in Southern California, the majority of which worked at its Los Angeles headquarters. The company also announced it was closing all 110 of its stores.
American Apparel twice filed for bankruptcy in 2015 and 2016. Last week, a Delaware court approved its $88 million sale to Gildan, who paid an additional $15 million for its inventory. The offer didn’t include the company’s manufacturing facilities or stores.
More than 330 jobs could be saved through a preliminary agreement the company reached last week with Broncs Inc., a Compton textile company, to buy the Garden Grove manufacturing facility, according to The Wall Street Journal.
Gildan told Bloomberg it has no obligation to keep any American Apparel employees.
“We’ve never been in a position to be able to assume operations,” Garry Bell, a spokesman for Montreal-based Gildan, said in an interview Tuesday. “We’re not buying an ongoing concern.”
Bell said Gildan chose not to exercise the right to assume leases on two factories and a distribution center in Los Angeles. The Canadian company is buying sewing machines and knitting and dyeing equipment for making wholesale products. Gildan already has plants in states including North Carolina and Georgia, but it only produces socks that are made in the U.S. Bell told Bloomberg, “We haven’t established yet what the manufacturing” plans are.
