Feb 23, 2017
American Apparel brand will continue being made in US, says Gildan CEO
Feb 23, 2017
Canada's Gildan Activewear plans to keep making key styles from its recently acquired American Apparel brand in the United States but will also manufacture some products elsewhere, a company spokesman said on Thursday.
In January, Gildan won a bankruptcy auction to acquire the edgy fashion brand's manufacturing equipment and intellectual property rights for about $88 million in cash, leaving American Apparel's made-in-the-U.S.A. heritage uncertain.
Gildan will use contractors in the western United States to make core American Apparel styles, spokesman Garry Bell said by phone. Other items, however, will be made at Gildan plants outside the United States.
"We're definitely going to manufacture product in the U.S.A. and support made-in-USA product," Gildan Chief Executive Officer Glenn Chamandy told analysts on Thursday during a quarterly earnings call. "At the same time, we think that there's an opportunity to offer product that's more price-centric."
Keeping jobs in the United States has become a hot-button political issue since President Donald Trump campaigned on stopping manufacturing from moving overseas.
Nearly 90 percent of Gildan’s 42,000 employees are in low-cost Caribbean and Central American countries. While the company makes yarn in North Carolina and Georgia, socks are the only apparel it manufactures in the United States.
Gildan expects to integrate American Apparel's customer service, web platforms and product distribution into its printwear business in March. Chamandy said he expected Gildan's distribution network to boost American Apparel's international sales.
American Apparel filed its second bankruptcy in as many years in November with about $177 million in debt after a turnaround plan failed. Gildan, whose branded apparel and printwear basics compete with Hanes Brands Inc, will not be taking American Apparel's approximately 110 retail stores.
Gildan has not yet determined how it would market American Apparel brand, its highest-priced product line, to consumers.
"We're going to make sure, as we go forward, that the brand is relevant with consumers, which we think will continue to help drive our printwear business," Chamandy said.
Chamandy said Gildan would run a small American Apparel office in Los Angeles to keep the "heritage of the brand alive," while using social media platforms to promote it.
American Apparel was known for operating some of the largest private garment-making operations in the United States, along with its racy marketing campaigns. Last month, the company began laying off 2,400 workers in Southern California.
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