London - The auction for bankrupted US fashion retailer American Apparel has come to end, with a certain Canadian apparel manufacturing firm being named as the last one standing.

Gildan Activewear Inc is said to have won the bankruptcy auction for the 'Made in the USA' retailer, after it raised its stalking horse bid to 88 million dollars, revealed sources to Reuters on Monday. A statement from Gildan Activewear Inc confirmed its winning bid on Tuesday morning.

Gildan Activewear Inc. places the highest bid in the bankruptcy auction for American Apparel

Gildan's final cash bid of 88 million dollars includes the acquisition of the worldwide intellectual property rights related to the American Apparel brand, as well as certain manufacturing equipment. The Canadian manufacturer did not specify which manufacturing equipment it would be taking over, but added that it would also separately purchase inventory from American Apparel to ensure a seamless supply of goods to the pintwear channel while Gildan integrates the brand within its printwear business.

“We are excited to be moving forward with this acquisition. The American Apparel brand will be a strong complementary addition to our growing brand portfolio. We see strong potential to grow American Apparel sales by leveraging our extensive printwear distribution networks in North America and internationally to drive further market share penetration in the fashion basics segment of these markets.” said Glenn Chamandy, President and CEO of Gildan.

Gildan's acquisition of American Apparel could mean the end of an era for US apparel manufacturing and the Los-Angeles based retailer, as the Canadian manufacturer's offer for the retailer did not include any of American Apparel's stores. Rather, Gildan's bid for 'Made in the USA' retailer included its brand assets, as well as some - but not all - of it manufacturing businesses in the US, meaning that the plug may be pulled on one of the biggest apparel making plants in the US.

However, the transaction is not set in stone just yet as it is still subject to approval from a bankruptcy judge byon January 12, 2017, although the Canadian manufacturer anticipates completing the acquisition by early February. Gildan Activewear originally placed a stalking horse bid of 66 million dollars for American Apparel in early November, 2016. But the bankruptcy auction for the retailer went on to attract numerous interest parties, including California-based apparel manufacturer Next Level Apparel, brand licensor Authentic Brands Group as well as online giant Amazon and fast-fashion retailer Forever 21.

American Apparel is set to continue trading in the US through its remaining stores, until the bankruptcy court has approved of the winning bid. The US retailer received court approval from a judge in mid-December to shutter nine stores in the US, and is expected to shut more locations across California, as a number of locations no longer receive new inventory. American Apparel declined to comment on the auction process or its current store portfolio.

The US fashion retailer first filed for bankruptcy in October 2015, after failing to successfully execute its turnaround plan. American Apparel went on to file for Chapter 11 once more in November 2016, which included its agreement with Gildan Activewear.

Photo credit: FashionUnited