Canadian company will pay $88M to buy LA-based American Apparel

The company, however, will not be purchasing American Apparel's 110 retail stores. Representatives for Amazon, Forever 21 and Authentic Brands didn't respond to requests for comment last week.

"The American Apparel brand will be a strong complementary addition to our growing brand portfolio", Glenn Chamandy, president and CEO of Gildan said in a statement Tuesday.

Gildan shares were up 3.3% in morning trading at $26.10 after the announcement. Sales declined, hitting $497 million in 2015, according to bankruptcy court records.

The Canadian company makes clothing, including such items as T-shirts, underwear, and socks, under various labels, including its own. Under the deal, Gildan will obtain the intellectual property rights associated to the American Apparel brand and manufacturing equipment.

Gildan had made an initial, or "stalking horse", offer of $66m. The firm does have distribution centers and yarn-spinning operations based in North Carolina and Georgia.

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"We haven't established yet what the manufacturing" plans are, Bell said.

According to a December report in California Apparel News, American Apparel's factory employees in Los Angeles received layoff notices that they'll be out of a job on January 7 unless the new owner decides to keep their facility open. He never graduated, setting off instead for SC, where he started making T-shirts.

Here's to hoping the company can rebuild in 2017. He also courted controversy with sexually charged advertisements featuring nonprofessional models and stunts like putting pubic hair on mannequins.

The board in 2014 voted to oust Charney as chief executive and chairman, citing allegations of sexual misconduct with employees and misuse of company funds. Those cases were all dismissed or settled. Though the sale still has to be approved through a bankruptcy court Judge in Delaware, Canadian company Gildan Activewear has reportedly won the bidding war to buy the company.

"We know that this brand has a strong consumer following", said Gildan's Bell.