American Apparel told nearly 3,500 employees in Southern California that they may lose their jobs on January 6 depending on the outcome of a likely sale to Gildan Activewear.

According to the California Employment Development Department, the potential layoffs would cover 332 in Garden Grove, 959 in South Gate and 2,166 in downtown Los Angeles where the company is headquartered.

American Apparel, which filed for bankruptcy last month for the second time, stated that the state-mandated Worker Adjustment and Retraining Notification Act (WARN) notices were “purely a legal precaution” and that “layoffs are not certain.”

Gildan Activewear, which bid $66 million to acquire American Apparel’s intellectual property rights and some other assets, has indicated its interest in maintaining at least a portion of manufacturing in the U.S. Gildan has no interest in 110 stores in the U.S. and 83 others around the world.

Competing offers, including ones for the company’s retail business, could arrive at a bankruptcy auction set for January 9.

Image courtesy American Apparel