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Forever 21 and Amazon eyeing up bankrupt American Apparel

By Vivian Hendriksz


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London - The American Apparel saga continues on in 2017, with reports that Forever 21 and Amazon are among the numerous companies vying to acquire bankrupt "Made in the USA" retailer.

The teen apparel chain and online retail giant, as well as California-based apparel maker Next Level Apparel and Authentic Brands Group are all said to be in discussion with the bankrupted retailer and its financial advisers, according to sources at Reuters. Forever 21, Amazon and the other interested parties have until Friday's deadline to submit any bids for American Apparel before the bankruptcy auction begins.

Amazon and Forever 21 said to be making an offer to acquire American Apparel

However, any offer would have to be more than the 66 million dollars (53.5 million pounds) stalking horse bid previously made by Canadian apparel manufacturing firm Gildan Activewear, which American Apparel agreed to sell its global intellectual property rights to when its filed for Chapter 11 bankruptcy protection last November.

The bankruptcy auction of the American Apparel will also lay out the future of the largest apparel manufacturing hub in California, which is currently seen as one of the most expensive US states to produce in, in terms of labour costs. Ensuring jobs remain in the US has become a major political point in the nation since the presidential election and Donald Trump's scheme to make the US great again.

Gildan's bid for American Apparel included a plan to secure American Apparel's production plants in southern California, which currently employs approximately 3,500 workers. However, sources at Reuters state that Gildan's plans will only save a percentage of American Apparel's manufacturing plant, as the majority of the Canadian's production facilities are located overseas.

If Amazon were to acquire American Apparel it would mark a significant growth for the online giant, who is currently trying to make headway into the global apparel and fashion market. The online giant launched its first in-house fashion labels last year and is expanding its fashion hubs in the US, Europe and India.

However, if Forever 21 would become the successful bidder for American Apparel it remains slightly unclear what the fast fashion retailer would do with its Californian manufacturing hub as it is best known for its trendy, but cheap fashion, which is mainly produced abroad.

An update in the bankruptcy auction for American Apparel is expected to be made sometime next week, according to sources. American Apparel declined to comment on the rumours.

Photo: American Apparel store Oxford Street, FashionUnited

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