Next Level Apparel challenges Gildan with bid for bankrupt American Apparel -source

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By Jessica DiNapoli | NEW YORK

NEW YORK California-based apparel maker Next
Level Apparel has submitted an offer to challenge a $66 million
bid from Canadian apparel manufacturer Gildan Activewear Inc for bankrupt American Apparel LLC, a person familiar
with the matter said Monday.

There were also partial bids submitted for the teen
retailer, including from liquidators for its retail inventory,
the person said. American Apparel plans to ask a judge for
approval on Jan. 12.

A U.S. bankruptcy court judge will have to approve the
winning bid.

American Apparel, in its second bankruptcy, is being sold in
an auction that began Monday morning in New York. The auction
for the retailer, famous for its sexually-charged advertising,
attracted interest from e-commerce giant Inc
, competitor Forever 21 Inc and brand licensor Authentic
Brands Group LLC, which led a consortium to acquire Aeropostale
Inc out of its bankruptcy last year.

American Apparel’s struggles show the major challenges
facing brick-and-mortar retailers as more consumers shop online.

It could not be determined whether any other bids submitted
for American Apparel were qualified to challenge Gildan, which
also makes Goldtoe socks and Anvil clothing. Gildan plans to
take some of American Apparel’s manufacturing plants in southern
California, one of the largest garment-making operations in the
U.S. with about 3,500 employees.

The bulk of Gildan’s manufacturing takes place overseas in
the Caribbean and Central America.

Privately held Next Level Apparel makes its garments in
China, Mexico and Central America, according to the company.

Next Level’s bid was deemed as qualified by American Apparel
to be able to challenge Gildan, the person said.

The source asked not to be identified because details of the
bankruptcy auction are confidential.

American Apparel and Gildan declined to comment. A request
for comment from Next Level was not immediately returned.

American Apparel filed its second Chapter 11 in November
with about $177 million in debt after a turnaround plan
implemented by its owners, a group of former bondholders,
failed. The company filed its first Chapter 11 in October 2015,
and emerged early last year.

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