American Apparel Inc. is an online-only retailer and former brick-and-mortar stores operator based in Los Angeles, California. Founded by Canadian businessman Dov Charney in 1989, it was a vertically integrated company that ranked as one of the largest apparel manufacturers and marketers in North America.
After losing money for six consecutive years, American Apparel filed for Chapter 11 bankruptcy in the U.S. on October 5, 2015 in the United States Bankruptcy Court for the Central District of California. It was reported that the brand then agreed to a plan with its creditors to convert $200 million of debt into equity, $90 million in debtor financing and $70 million in new capital. The company officially exited bankruptcy after its financial restructuring plan was accepted by the Bankruptcy Court in Delaware and became privately owned by its creditors and bond holders, thus severing ties with all former stockholders as well as ex-CEO and founder Dov Charney. In January 2017, Gildan Activewear purchased American Apparel’s intellectual property and other assets for $88 million in a bankruptcy auction after the company filed for bankruptcy a second time in November 2016.
In January 2017, American Apparel laid off 2,400 Southern California workers and started the process of shutting down company factories and closing its 110 stores, using Chapter 7-like tactics.
As of mid-2017, American Apparel runs as an online-only retailer and markets itself as “Ethically Made—Sweatshop Free,” with the majority of its products being made internationally. Most of its apparel is sourced from factories in Central America, primarily Honduras and Nicaragua.
In January 2018, the company had an executive board consisting entirely of women.
American Apparel was founded in 1989 by Canadian Dov Charney.
In 1997, after a variety of iterations, including a period of manufacturing in South Carolina, the company moved to Los Angeles. Charney began to sub-contract sewing with Sam Lim who, at the time, had a shop with 50 workers under the Interstate 10 freeway in east LA. Months later the two became partners. In 2000 American Apparel moved into its current factory in downtown Los Angeles where it continued to grow primarily as a wholesale business, selling blank T-shirts to screenprinters, uniform companies and fashion brands. After its experience as a wholesale brand, the company moved into the retail market. The company was ranked 308th in Inc.’s 2005 list of the 500 fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over US$211 million. 
In late 2006, American Apparel went through a reverse merger and became listed on the American Stock Exchange.
It is also one of the few clothing companies exporting “Made in the USA” goods and in 2007 sold about $125 million of domestically manufactured clothing outside of America. The company promotes labor policies that exclude use of clothing manufactured in sweatshops.
In 2010, American Apparel’s auditors, Deloitte & Touche, resigned after informing the company that its financial statements for 2009 may not be reliable. The resignation led to investigation by U.S. Securities and Exchange Commission and the United States attorney’s office for the Southern District of New York.
In April 2011, American Apparel confirmed that it had secured $14.9 million in financing from a group of Canadian investors. Under the deal announced, American Apparel sold some 15.8 million shares of common stock at 90 cents a share to a group of investors led by Michael Serruya and Delavaco Capital. The investors also received warrants to buy as much as 27.4 million additional shares.
In April 2013, American Apparel issued a private offering of $206 million in senior secured notes. The proceeds were used to repay a long-standing, high-interest credit facility from Lion Capital and Crystal Financial.
In June 2014, the Board of Directors decided to oust American Apparel founder, chairman and CEO, Dov Charney, after allegations of misconduct and inappropriate behaviour towards employees. As interim chief executive during the search for a permanent CEO, the company’s CFO John Luttrell was appointed. As co-chairmen the company appointed Allan Mayer and David Danziger. Charney, through his lawyers, claimed his ousting was illegal and demanded reinstatement. Soon after, Lion Capital demanded the repayment of a $10 million loan four years early. A failure to repay the loan would trigger a default on a $50 million credit line with Capital One Financial.
In December 2014, American Apparel announced the official termination of CEO Dov Charney and the promotion of fashion executive Paula Schneider to that position.
As of September 2015, American Apparel was trying hard to avoid bankruptcy as it scrambled to raise money to pay down US$15.4 million debt due in October, 2015. It was struggling to find funds as it prepared to report a torrid set of financial results in the coming weeks.
The clothes retailer warned investors in August 2015 that it would not have enough cash to “sustain operations for the next twelve months” which raises “substantial doubt that we may be able to continue as a going concern”. The firm filed for Chapter 11 bankruptcy on October 5, 2015. In January 2016, the brand rejected a $300 million takeover bid from Hagan Capital Group and Silver Creek. The investment firms are supporters of Dov Charney.  In January 2017, American Apparel was acquired at auction for $88 million by Gildan Activewear, a Canadian sportswear company. Montreal-based company Gildan Activewear Inc. bought American Apparel but not its physical stores.