Stocks Distributed to American Apparel Employees
Christmas comes a tad late for American Apparel Inc. employees this year, but it comes with a bang.
The Los Angeles apparel maker, known for its blank T-shirts and other knit clothing, was acquired in mid-December by New York–based Endeavor Acquisition Corp. and taken public in a deal worth about $774 million. American Apparel now trades on the American Stock Exchange under the symbol APP, most recently closing at $13.85 a share on Jan. 3.
As part of the acquisition deal, it was agreed that 2.71 million shares of common stock would be distributed to employees in mid-February. The value of the stock is about $37.5 million.
About 4,000 employees worldwide who have been with the company for one year, as of Dec. 14, 2007, will receive approximately 250 shares for each year of employment. Part-time employees will receive fewer shares than full-time workers.
For those employees who have been with the company for less than one year, American Apparel management said it plans to propose an additional stock program, which would be subject to board approval.
After the current stock distribution is completed, there will be another 5 million shares available for future grants to employees.
American Apparel founder and Chief Executive Dov Charney, who still owns 55 percent of the company, said having employees own part of the company has always been his dream. “Placing nearly $40 million of stock into the hands of our employees is an important milestone in the history of American Apparel,” he said in a statement.
American Apparel, founded in the late 1990s, is a vertically operated business, manufacturing all of its clothing in an old factory in downtown Los Angeles. It also operates more than 166 American Apparel stores in 13 countries.—Deborah Belgum
