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Amazon and Forever 21 circle American Apparel

Amazon and young fashion retailer Forever 21 are among the companies considering interested in acquiring American Apparel after the US clothing retailer filed for bankruptcy in November last year, it has been reported.

Brand licensing company Authentic Brands Group and Next Level Apparel, a California-based clothing manufacturer, are also thought to be considering offers, Business Insider reports.

American Apparel currently employs 3,500 people at its California factory and is famous for its “Made in the USA” labelling.

Should a company wish to acquire American Apparel, they would be required to exceed a $66m (£53m) stalking horse bid from the Canadian company Gilda Activewear inc, which was agreed when American Apparel filed for bankruptcy.

A stalking horse bid is an attempt by a bankrupt debtor to test the market for its assets before auctioning them off. The intent is to maximise the value of its assets or avoid low bids, as part of (or before) a court auction.

In December, the brand closed 12 out of 13 of its UK branches, becoming the latest in a stream of US retailers to scale back UK stores. In October, Banana Republic announced the closure of all 25 UK stores in Britain, while Forever 21 is also reducing its number of stores.

Forever 21 and American Apparel have yet to respond to requests for a comment. Amazon said it does not comment on speculation. 

Readers' comments (1)

  • If Amazon proceeds and succeeds with offer it will certainly have the ability to make America[n Apparel] great again!

    Whilst there may be certain issues with such a trade mark, Amazon’s financial resource could impact American Apparel’s competitors in the US and elsewhere.

    Stephen Sidkin
    Fashion Law Group
    Fox Williams LLP

    Unsuitable or offensive? Report this comment

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