T-shirt and activewear maker Gildan offers $66M to buy American Apparel.
There’s tons of news about this acquisition, but here’s an article from Fast Company that covers the news pretty well.
An Inside Look at Gildan (link)
There are a couple of interesting things about this acquisition.
First, Gildan doesn’t want any of the Amercian Apparel physical retail stores.
Assuming that is the case, it could open up opportunities for other retails to snap up that would-be prime real estate at a deep discount.
Second, Gildan seems more interested in the American Apparel factory assets.
In other words, Gildan is interested in manufacturing in the United States — and with the acquisition, will be doing so in Los Angeles, California.
There’s some speculation that Gildan is doing this as a result of new incoming President, Donald Trump, who has vowed to get rid of the NAFTA deal.
If that does happen, it’s going affect a lot of apparel brands that take advantage of the NAFTA agreement’s elimination of clothing export/import tariffs.
Meaning, brands manufacturing their apparel in Canada and Mexico, and exporting them to the United States are gonna pay more to get their garments into the United States, which increases their overall cost structure.
For some, that will result in either lower profits, or price increases.
So, if you’re buying your undershirts, underwear, socks or any other apparel from brands manufacturing in NAFTA countries, you might be paying a little more for your stuff if NAFTA disappears.