American Apparel gets back to stores

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This article was published 07/05/2018 (2744 days ago), so information in it may no longer be current.

American Apparel is returning to the physical realm.

The iconic Los Angeles-based brand is preparing to open a flagship store in its home city later this year, its first foray back into brick-and-mortar shops after all its locations closed following a bankruptcy process. New owner Gildan Activewear Inc., the Montreal company that bought American Apparel but not the physical stores in an auction last year, said the new location will complement e-commerce operations and serve as an incubator to gauge trends.

“We’re opening one and that’s going to be like a test model store for us, and then we’re going to see where that takes us in the future,” Gildan CEO Glenn Chamandy said in an interview in Montreal last week. “We either could franchise, we could open a couple more, we haven’t decided yet.”

The new store will open in the fourth quarter at a defunct American Apparel location on Melrose Avenue that was once the biggest in California. It will be slightly smaller and allow customers “to take part in the full American Apparel experience beyond just buying products,” Gildan spokesman Garry Bell said in an email.

Since purchasing American Apparel for US$88 million, Gildan integrated the brand into its own low-cost manufacturing chain and focused at first on selling blank T-shirts and other items to wholesalers, which customize them for sports teams or events.

It then relaunched the brand’s U.S. website in August and expanded online sales to 200 countries last month. Physical stores closed after last year’s bankruptcy and were left out of the deal with Gildan.

While American Apparel touted that all of its clothes were produced in the U.S. before the bankruptcy, most items are now made at either Gildan’s factories in Central America or sub-contracted elsewhere. The website also offers a handful of U.S.-made items to customers partial to the brand’s domestic-manufacturing roots — which look the same but cost more. The initiative hasn’t gained much traction, according to Chamandy.

In its heyday, American Apparel ran 280 stores and five factories that powered sales of more than US$600 million. Gildan, which reported US$2.8 billion in sales last year, expects to make US$100 million from the brand in 2018. American Apparel also has given Gildan a foothold in the lucrative niche of fashionable basics.

— Bloomberg News