American Apparel filed for its second bankruptcy protection in just over a year on Monday, weighed down by intense competitive pressures facing U.S. teen retailers and a rocky relationship with its founder. The second bankruptcy comes as the retailer struggles to overcome years of losses and rising online competition. Separately, Canadian apparel maker Gildan Activewear Inc said it agreed to buy intellectual property rights related to the American Apparel brand and certain assets from American Apparel for about $66 million in cash. Gildan will not be purchasing any retail store assets, it said in a statement.
Total Retail's Take: We knew this bankruptcy filing was coming, it was just a matter of when. Well, that time is now. What I find more interesting than the bankruptcy filing is American Apparel's sale of intellectual property to Gildan Activewear. American Apparel has been actively looking for a buyer, and it appears that the sale process is underway. Selling its assets and reorganizing under a new parent company seems to be American Apparel's best hope for remaining in business.