Are Amazon and Forever 21 Competing to Buy American Apparel?
The bankrupt basics brand reportedly has a number of suitors.
Earlier today, Racked’s sister site Recode reported that Amazon’s preparing to wade deeper into designing and selling its own clothing with the introduction of a private label activewear line. It seems that the e-commerce giant might be trying to win the fashion game on another front, too: Reuters reported this afternoon that Amazon, Forever 21, Next Level Apparel, and Juicy Couture owner Authentic Brands Group are all considering bids to acquire American Apparel, which filed for bankruptcy protection for the second time in a year in November.
To gain ownership of American Apparel, though, they’ll have to beat out the $66 million bid that Gildan Activewear put down when the embattled basics brand filed for bankruptcy this fall. A rep for American Apparel declined to comment on the status of the latest bids.
Each potential bidder presents a very different-looking future for American Apparel, which spent much of 2015 attempting to clean up its image after founder Dov Charney was officially fired in December 2014 and a new CEO, Paula Schneider, was brought in. (Schneider departed American Apparel in September 2016.) While Forever 21’s influence might push the brand toward a more fashion-focused look, the Canadian Gildan is known as a provider of blank T-shirts for custom printing and may want American Apparel for that wing of its business.
And Amazon, which has been looking for inroads into the fashion world since basically forever, could gain a lot from bringing such a recognizable clothing brand under its wing.
American Apparel’s situation is similar to that of Nasty Gal, which also filed for bankruptcy in November and announced last week that it had received a $20 million bid from the British fast fashion retailer Boohoo to acquire its intellectual property. These once-popular brands have fallen from financial grace, and other parties have entered the picture to scoop up the remains of their cachet with consumers, however marginal. Sometimes you have to wonder if the gains are really worth it.
This post has been updated to include (no) comment from American Apparel.
American Apparel had a good run. One of its supposed strengths was vertical integration, which meant it owned everything from the fabrics, the manufacturing, the transportation and the stores. However, it truly over-expanded, like MACYs. Instead of playing it safe and placing a selected stores in large population centers, it thought it could find niche markets in many smaller towns, like Santa Cruz, California. But that is what happens when you have a megalomaniac at the controls (or greedy venture capitalists in the case of Macys).
With regards to the suitors, if Gildan bought American Apparel, there might be a bright spot. It would be nice to see American made T shirts again with the Gildan label.