Bankruptcy, sale mean American Apparel on Telegraph to close

The American Apparel store on Telegraph Avenue will close by the end of April. Photo: Google Earth

The American Apparel store on Telegraph Avenue, long a favorite place for UC Berkeley and Berkeley High students to shop for bright cotton clothing, will shut its doors at the end of April.

The closure comes after the company filed for Chapter 11 bankruptcy in November and sold its assets – but not its retail stores – in January to the Canadian company Gildan Activewear for $88 million. That deal should be finalized in February.

Gildan intends to incorporate American Apparel products into its extensive line of clothing, but will not operate separate stores.

The Daily Californian was the first to report that the Telegraph Avenue store would close.


American Apparel was well known for manufacturing its clothes in the United States, a fact that made many of its employees proud.

“I liked what the company’s ideals were,” said Christian Cruz, a 2016 graduate of UC Berkeley who works at the Telegraph Avenue store. “They were a big supporter of LGBTQ rights, immigrant rights. Our stuff might be a little pricier but everything is well made, it’s made in the U.S. and it’s been made fairly. It’s been a real joy,” to work here, he said.

American Apparel for years also weathered controversy surrounding founder Dov Charney, who was embroiled in a number of sexual harassment suits filed by ex-employees. Charney was dismissed as CEO in 2014, and American Apparel has stumbled through a tough retail environment in the years since.

Cruz said the last official day of the store is April 30, but it may close sooner if it runs out of inventory. Right now, everything in the store is 40% off, he said.

Gildan Activewear has not yet decided where it will manufacture the American Apparel line, according to Garry Bell, vice president of corporate communications and marketing for Gildan. On one hand, it would be shortsighted not to capitalize on the brand’s connection with the U.S., he said. Gildan does manufacture a small percentage of its products (socks and yarn made from American-grown cotton) in the United States in factories in Massachusetts and North Carolina. But the bulk of the company’s 53,000-person workforce makes cloth and clothing in Gildan’s factories in Honduras and the Dominican Republic, he said.


The days of thousands of workers sewing American Apparel clothing in Los Angeles appear to be over, however. The Los Angeles Times reported that American Apparel started laying off its 2,400 workers in Los Angeles on Monday, “kicking off its final chapter as the country’s largest garment maker.”

Gildan, based in Montreal, produced 1 billion products in 2016 and 550 million pairs of socks, said Bell. The company makes T-shirts, fleece, sports shirts, and more under a number of brands including Gildan, Anvil Knitwear and Comfort Colors. It also sells the Gold Toe and Peds sock line.

Gildan also has a good track record of corporate responsibility, although it has never trumpeted its accomplishments as loudly as American Apparel did, said Bell.

Gildan manufactures 93% of its products in its own factories, according to Bell. More than half (51%) of the energy used to run those factories comes from renewable sources, mostly biomass. Around 89% of the company’s waste gets repurposed or recycled. It has also reduced its water consumption by 17%, Bell said.

Gildan wholesales sells many of the T-shirts and sweatshirts it makes to retailers who then attach logos and resell the produce. Gildan has not yet decided if it will only wholesale American Apparel goods or also sell it to stores.


Stuart Baker, the executive director of the Telegraph Business Improvement District, said American Apparel will definitely be missed. The closure is indicative of the tough retail environment, which is playing out not only in Berkeley but around the country.

“It’s indicative of the seismic shift in retail – the Elmwood is facing the same challenge,” said Baker. “Everyone is looking for a new model that will be a success.