Canadian apparel maker Gildan Activewear Inc. (GIL) has won a bankruptcy auction for U.S. fashion retailer American Apparel LLC (CURXQ) after raising its offer to around $88 million, a person familiar with the matter said Monday.
Gildan’s takeover marks the end of an era for the iconic Los Angeles-based company, which was founded in 1998 by an eccentric Canadian university drop-out and grew to become a part of U.S. popular culture thanks to its racy advertising.
Gildan will not take any of American Apparel’s 110 stores, but will own its brand and assume some of its manufacturing operations, the source said. The deal is subject to a bankruptcy judge approving it on Thursday.
American Apparel declined to comment, while Gildan did not immediately respond to a request for comment. The source asked not to be identified because details of the bankruptcy auction are confidential.
The auction for the retailer also attracted an offer from California-based apparel maker Next Level Apparel, a source said earlier on Monday. However, Gildan won after raising its original $66 million stalking horse bid, the source added.
The bankruptcy auction also attracted interest from e-commerce giant Amazon.com Inc. (AMZN), competitor Forever 21 Inc. and brand licensor Authentic Brands Group LLC, which led a consortium to acquire Aeropostale Inc (ARO) out of its bankruptcy last year, sources said last week.
American Apparel’s struggles show the major challenges facing brick-and-mortar retailers as more consumers shop online. Several U.S. retailers, including Aeropostale Inc. and Pacific Sunwear (PSUN) of California Inc, have filed for bankruptcy in recent months.
Gildan plans to assume ownership of some of American Apparel’s manufacturing plants in southern California, one of the largest garment-making operations in the U.S. with about 3,500 employees, sources have previously said.
Gildan makes most of its garments offshore, with close to 90 percent of its 42,000 employees in low-cost Caribbean and Central American countries. It has yarn-spinning and distribution centers in cheaper parts of the U.S., including North Carolina and Georgia.
For more on American Apparel, watch Fortune’s video:
American Apparel filed its second Chapter 11 in November with about $177 million in debt after the failure of a turnaround plan implemented by its owners, a group of former bondholders. The company filed its first Chapter 11 in October 2015, and emerged early last year.
The company’s finances had deteriorated quickly. In 2013, it recorded sales topping $633 million, capping off a period of growth. In 2014, founder and then-CEO Dov Charney was removed from the company. Sales declined, hitting $497 million in 2015, according to bankruptcy court records.