Brand licensors have their eyes on American Apparel. Sources have told Reuters that multiple companies, including Authentic Brands Group LLC and Iconix Brand Group Inc., are interested in acquiring the retailer.
These negotiations may require American Apparel to file for bankruptcy for a second time in order to offload “tens of millions of dollars” in obligations, including leases for more than 200 retail stores. The clothing retailer has been through multiple rough patches since its CEO Dov Charney was fired in 2014, including filing for Chapter 11 bankruptcy protection in January 2016.
Reuters also reported that the company would consider moving its factories outside of Los Angeles, but that American Apparel would not make any deal to manufacture its products outside the U.S. The company is one of the few large retailers to source its apparel products from domestic factories.
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“I’m saddened to hear the news,” Charney, who attempted to buy back his company for $300 million in January, told Reuters. “I think it could be devastating for the Los Angeles community.”
There is no certainty that these early-stage talks will definitely lead to a sale, or that any deal will be contingent on a bankruptcy filing. A spokesperson for American Apparel declined to comment, according to the Reuters report.
