American Apparel turns Canadian after sale to activewear brand

American Apparel is about to become a bit less American.

Canadian clothing maker Gildan Activewear said Tuesday that it would buy the rights to the beleaguered California-based company’s brand after placing the winning bid in a bankruptcy auction. The final buying price was $88 million.

The sale includes all of American Apparel’s intellectual property — the name, logo and any other trademarks — along with certain pieces of manufacturing equipment. The company’s more than 100 brick-and-mortar stores were not part of the deal.

American Apparel and its mall brand peers like Abercrombie & Fitch and Gap have been struggling for months as retail sales have moved online and fashion tastes have changed. The company’s flagging sales were also compounded by the bad press surrounding its 2014 ouster of then-CEO Dov Charney for alleged sexual harassment.

After failing to rein in its mounting losses,  the company filed bankruptcy for a second time last November. Gildan offered $66 million for the brand at the time but the price was driven up by competing bids.

The brand also attracted interest from Forever 21, Amazon — which has been doubling down on private-label clothing brands — and other retailers.

Under Charney, American Apparel gained notoriety for its racy advertising and its leader’s brash antics. The company also made a selling point out of the fact that its clothes were made in the United States.

Gildan notably relies on low-cost manufacturers in Central America and the Caribbean for most of its inventory.

The sale is expected to go through in early February pending legal approval.

BONUS: Nicola Formichetti is making genderless clothing a reality