February 23, 2017 / 5:04 PM / in 9 months

UPDATE 2-Gildan to keep making some American Apparel styles in U.S.

(Adds background on retail availability)

By Allison Lampert and Jessica DiNapoli

MONTREAL/NEW YORK, Feb 23 (Reuters) - Canada’s Gildan Activewear Inc plans to keep making key styles from its recently acquired American Apparel brand in the United States but will also manufacture some products elsewhere, a company spokesman said on Thursday.

In January, Gildan won a bankruptcy auction to acquire the edgy fashion brand’s manufacturing equipment and intellectual property rights for about $88 million in cash, leaving American Apparel’s made-in-the-U.S.A. heritage uncertain.

Gildan will use contractors in the western United States to make core American Apparel styles, spokesman Garry Bell said by phone. Other items, however, will be made at Gildan plants outside the United States.

“We’re definitely going to manufacture product in the U.S.A. and support made-in-USA product,” Gildan Chief Executive Officer Glenn Chamandy told analysts on Thursday during an earnings call. “At the same time, we think that there’s an opportunity to offer product that’s more price-centric.”

Keeping jobs in the United States has become a hot-button political issue since President Donald Trump campaigned on stopping manufacturing moving overseas.

Nearly 90 percent of Gildan’s 42,000 employees are in low-cost Caribbean and Central American countries. While the company makes yarn in North Carolina and Georgia, socks are the only apparel it manufactures in the United States.

Gildan, which competes with Hanes Brands Inc, expects to integrate American Apparel’s customer service, web platforms and product distribution into its wholesale printwear business, in March. Chamandy said he expected Gildan’s distribution network to boost American Apparel’s international sales.

Gildan, which did not acquire American Apparel’s 110 stores, is still assessing how to market the brand, its highest priced product line, directly to consumers. The clothing and other merchandise will be available online and in stores at least through the beginning of April.

American Apparel filed its second bankruptcy in as many years in November with about $177 million in debt after a turnaround plan failed.

“We’re going to make sure, as we go forward, that the brand is relevant with consumers, which we think will continue to help drive our printwear business,” Chamandy said.

Chamandy said Gildan would run a small American Apparel office in Los Angeles to keep the “heritage of the brand alive,” while using social media platforms to promote it.

American Apparel was known for operating some of the largest private garment-making operations in the United States, along with its racy marketing campaigns. Last month, the company began laying off 2,400 workers in Southern California. (Reporting by Allison Lampert in Montreal and Jessica DiNapoli in New York; Editing by Lisa Von Ahn and Andrew Hay)

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