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  • 11.17.16

In this letter, American Apparel tries to reassure workers after the bankrupcy

But importantly, it does not say whether they will keep their jobs. 

Right now the company is in talks to be sold to Gildan Activewear. (I provided an inside look at Gildan in this story.) In this letter to staff, American Apparel says their salary, hours, and benefits will stay the same during the “near-term” acquisition process. But it does not address the elephant in the room: will they stay employed after the sale?

According to the New York Post, employees at the American Apparel headquarters in downtown LA were told that they would be terminated should potential purchasers not wish to continue manufacturing. If Gildan purchases the company, it will buy the manufacturing operations thereby potentially saving some jobs, but this is not set in stone. 

Read the full letter here: 

November 17, 2016

Dear Fellow American Apparel Employees:

As you know, we have an agreement with global apparel company Gildan Activewear for a potential purchase of our brand, inventory and certain of our manufacturing facilities here in L.A., which would save jobs in the U.S.

This week, CEO Chelsea Grayson, Kurt Messenger, our head of Supply Chain and Manufacturing and I were excited to give the Gildan executives a tour of all our Los Angeles-area facilities. It was so gratifying to see the team’s efficient and high-quality operations and the true spirit of collaboration. We loved the beautiful smiles, spontaneous cheering and good will that you showed our visitors – great job everyone! Please keep working hard and showing our “can do” spirit during this facility review process. There will be additional tours of our operations over the next few weeks, and we thank you in advance for all of your efforts.

Please recall that the process that we have entered into includes an “auction,” which is designed to make sure that American Apparel has the opportunity to select the right buyer (or buyers) for the business. Your management team will be doing all that it can in partnership with the Judge to evaluate opportunities from all companies interested in buying American Apparel, including our retail business.

I realize that there is some uncertainty right now, so I wanted to make one thing very clear: you are the key to keeping the business running until we are able to close a deal that secures American Apparel’s future. You are who the management team has always relied on, and who we hope to continue to depend on through this process. Each one of you is American Apparel.

Here are some details I can provide on current events. While we won’t know what the final acquisition will look like until the end of this year or early next, I wanted to be as open as possible with you about the near-term:

· Pay: your salary will not change at all.

· Hours: there will be no shifts in your schedule as a result of this auction process. Any changes will be in the ordinary course of business.

· Benefits: your 401K is still accruing, and your health insurance still stands. The providers remain the same.

· Retail: keeping our stores open and keeping inventory selling is a key part to successfully closing the deal, and beyond. There continue to be ongoing discussions about what the retail business will look like in the future.

We will continue to update you as we move forward as a team. Until my next update, you can reach the Human Resources Department, or any of the senior management, at any time with questions you may have.

As always, we thank you for your continued hard work. You are truly the spirit of American Apparel.

Sincerely,

Craig Simmons

Human Resources

American Apparel, LLCES