Amazon and Forever 21 are said to be interested in American Apparel

Amazon and Forever 21 are said to be interested in American Apparel

Online giant Amazon and teen apparel chain Forever 21 are understood to be among the companies considering offers to acquire bankrupt retailer American Apparel.

American Apparel entered into Chapter 11 bankruptcy for a second time in November last year. On the same day, Canadian manufacturer Gildan Activewear announced plans to become the "stalking horse" bidder for the company in a deal worth around US$66m.

Gildan Activewear to buy bankrupt American Apparel for $66m

According to Reuters, however, Amazon and Forever 21, Next Level Apparel and brand licensor Authentic Brands Group are all in talks with American Apparel and its financial advisers about submitting offers ahead of a deadline for the auction of the company on Friday (6 January).

They will have to top Gildan's offer, which includes an option to keep American Apparel's manufacturing plants in southern California, which employ about 3,500 workers. Its deal would not include any retail stores, however, and could lead to jobs cuts of up to 3,500.

An outcome on the auction is expected next week, sources told Reuters. Amazon and Forever 21 did not return a request for confirmation at the time of going to press.

Amazon's reported interest in American Apparel cements its commitment to growing its clothing division. A series of job postings on the retail giant's website suggest it is preparing to develop its own line of workout wear; and last month it launched a new private label menswear brand available exclusively to members of Amazon Prime.

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