Twice-bankrupt American Apparel is no stranger to bad publicity. But, 40 percent-off all online and in-store purchases–which was supposed to end January 8, according to its website–has been extended indefinitely, causing quite a buzz among shoppers. Although the Canadian company Gildan Activewear bought rights to American Apparel’s intellectual property and other assets, according to Business Insider, that does not include the 110 brick-and-mortar stores in the U.S., which will likely be forced to close if not sold.
Gildan gained a temporary license to all 110 stores, but that expires in a little over two months, according to Business Insider. Gildan never intended to resume operations at American Apparel stores, and does not plan to keep the stores beyond the 100 days designated by the temporary license.Via Instagram (@americanapparelusa), American Apparel promotes its 40 percent-off sale almost daily. Many posts suggest several pieces–including the popular Disco Pants–are nearly sold out, while another insists the company’s line of basics will soon be considered “vintage” due to the company’s bankruptcy.
American Apparel’s first bankruptcy, filed in 2015, was caused by “a $300 million debt load, intense competition and excess inventory,” according the The Fashion Law. The bankruptcy also occurred on the heels of allegations of misconduct against former Chief Executive Dov Charney’s in 2014. Although Charney denied the allegations, it is still very likely the issue caused the Los Angeles-based company to suffer.
The company, which prides itself on sweatshop-free, Made-in-the-U.S.A clothing, is one of the largest manufacturers in the country. Because prices are relatively affordable at American Apparel (even without a 40 percent-off sale), its competition includes fast fashion retailers, all of which outsource operations to developing countries like Bangladesh. Staying true to its name, American Apparel, chose not change its manufacturing protocol in order to keep up with competition.
When stores eventually close, some 2,000 employees will be laid off, in addition to the 2,400 already affected by the bankruptcy, according to Business Insider. It is unclear whether the online store will remain, or if the company’s social media presence will be archived.