Employees of American Apparel are receiving their pink slips en masse as the retailer—which sold to Canadian company Gildan Activewear for $88 million in bankruptcy court last week—begins shutting down its factories and its 110 retail stores.
Once valued at nearly $1 billion, American Apparel—the largest U.S.-manufactured garment company—has struggled both with financial loss and boardroom scandal (including sexual harassment lawsuits against the company’s founder, Dov Charney) and politics over the past decade. Now valued between $180 and $270 million, the company will cease operation when Gildan Activewear takes over.
While Gildan originally considered maintaining American Apparel’s U.S. factories, they’ve since decided not to. As such, 2,400 employees of American Apparel’s California stores and factories were laid off on Monday.
An American Apparel spokesperson stated, “The global retail industry has faced strong headwinds across the board, and American Apparel has been no exception to this rule.”
According to the L.A. Times, Charney—who was ousted from his company in 2014—is ““devastated and infuriated.”
Charney adds, “My heart goes out to the workers. I tried my best to recapture the company but was unable to.”
The L.A. Times reports:
Until the sale closes in February, some workers are being kept on to operate the factories in downtown L.A. and in Garden Grove, as well as the distribution center in La Mirada. Some will also continue working in human resources and other departments to keep the company running.
“Everything is over,” says factory worker Francesca Cortes. “We didn’t even get severance, like the workers who were laid off before got.”
American Apparel stores will remain open for at least 100 days under their new license with Gildan.