American Apparel is now producing shirts for its wholesale division in Honduras and Nicaragua. American Apparel products will continue to be Made in the US, but it would also manufacture products elsewhere.
Gildan Activewear acquired American Apparel in February after the Los Angeles-based company filed for its second bankruptcy in November 2016. Gildan has manufacturing hubs in Central America and the Caribbean where costs are much lower than anywhere in the US.
American Apparel let go most of its staff in January and began closing stores around the world, including in France, the UK and Germany. The label is still operating 72 locations that are offering 80 per cent discounts, but most of the retail locations will close in April. The retailer has stores in UK, Ireland, Germany, Spain, Canada, Japan and Australia.
The teen retailer, founded in 1989, was known for its sexually charged advertising. The hoped-for turnaround of the clothing manufacturer and retail chain—which has long grappled with shrinking sales and an outsize store footprint—did not happen. At least eight US teen retailers have filed for bankruptcy in the past two years as the spending habits of young people shift and they visit malls less often.