Amazon Making Bid For Failing American Apparel?

Seattle headquartered Amazon has announced that it is among the companies interested in making a bid for failing company American Apparel.

Ecommerce giant Amazon, once an online bookstore, is now a marketplace for household goods and electronic services. Amazon, however, has also recently begun acquiring a strong foothold in the apparel industry. The company recently launched seven of its own private label brands, and is quickly becoming a strong competitor to nationally failing department stores. It’s also rumored that Amazon seeks to extend its clothing lines to include athletic apparel in the near future.

Reports by Reuters identified Amazon and Forever 21, a national teenage clothing chain, as top contenders for the purchase of the company. Others listed were Next Level Apparel and Authentic Brands Group LLC. Each of these companies declined comment in the Reuters report.  

Los Angeles, California based American Apparel was founded in 1989. The clothing company markets its brand as “sweatshop free” and “made in the USA”, and claims to employ 4,500 employees. Once a benchmark for industry standards, the company has not made a profit since 2009, and filed for chapter 11 bankruptcy in 2015. When American Apparel filed bankruptcy a second time, its debt was reported at $177 million.

As eCommerce trends have grown, Amazon has taken advantage of consumers’ desire to purchase products from the convenience of their homes. In October, 2016, Amazon was reported to be on track to become the largest apparel retailer in the United States, surpassing department stores such as Macy’s.

American Apparel, upon filing for bankruptcy in 2016, received a bid from Canadian athletic apparel manufacturer Gildan Activewear. Reuters reports that American Apparel did agree to this offer. Any company wishing to buy the American Apparel company and brand would need a higher bid to secure the sale.

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