Canada's Gildan Activewear bids to buy assets of bankrupt American Apparel

Canadian clothing manufacturerGildanActivewearInc. has offered $66 million for the rights to the American Apparel brand name after the latter company has filed for bankruptcy protection for the second time in as many years.

Montreal-basedGildanhas bought the rights to use the name and a limited supply of inventory from American Apparel, but will not be buying any of American Apparel's retail stores as part of the transaction.

Both companies can trace their origins to the city of Montreal, asGildanwas founded there in 1984, and American Apparel was founded there in 1989 before later moving its headquarters to the U.S.

American Apparel filed its first bankruptcy in October 2015 amid declining sales and an acrimonious legal fight with ex-CEO DovCharney, who wasbooted from the company he founded partly due to allegations of improprietywith employees.

Those bankruptcy proceedings finished in February of this year, when the bondholders who now own the company quietly moved ahead with plans to sell the brand to recoup their losses.

The chain, known for its sexually suggestive advertising campaign, listed assets of between $100 million and $500 million US, and about the same amount of liabilities, according to bankruptcy court documents.

American is just the latest youth-oriented clothing line to come under intense financial pressure in recent years, as eropostale, Wet Seal LLC and Pacific Sunwear of California Inc, have filed for bankruptcy since the start of 2015