The International Future of American Apparel

After Montreal-based Gildan Activewear won the bid for the bankrupt American Apparel, stores have started liquidating their supplies and people are left wondering exactly what the future holds for the Los Angeles-based company. Gildan Activewear made it very clear from the get-go that it would keep some of the company's manufacturing assets in downtown L.A., but it looks like not all of the merchandise will come from Southern California—or even the U.S. at all.

Gildan Activewear CEO Glenn Chamandy told Bloomberg that while American Appaerl will still manufacture some clothing in the U.S., it plans to put the brand on cheaper items sourced internationally.

"We're going to do a combination of both," Chamandy said. "We're going to continue to support their core made-in-USA business, but we're also going to offer a product where they couldn't compete before."

According to Bloomberg, Gildan's socks are the only finished goods the company makes in the U.S. And even still, most of the sewing is done in Central America, Bangladesh or Caribbean countries.

Gildan Activewear predicted that the addition of American Apparel will add between $50 and $75 million to the company's revenue in 2017. Furthermore, since outsourcing now becomes a reality for the American Apparel brand, the proposed border adjustment tax could have an effect. This could cause Gildan to raise wholesale and retail prices. Chamandy also said that this tax would affect all garment manufacturers, but that Gildan buys most of its cotton from U.S. vendors.

"Other than American Apparel, there's no apparel made in the United States," Chamandy said.