According to a new article from Bloomberg, Amazon is considering buying American Apparel.
While purchasing a company that’s been hemorrhaging money for years may seem like an unsound investment, business analysts argue there are a number of potential upsides for the e-commerce giant.
Firstly, Amazon has been aggressively expanding into fashion with the acquisition of Zappos, Shopbop, and the creation of their own private labels, Lark & Ro and Franklin Tailored. However, they have yet to develop a strong following amongst millennial shoppers, a demographic that still AA has “an enduring connection with… and [who] are more inclined than their elders to shop online.”
Secondly, AA employs 4,500 people at its Los Angeles clothing factory, which could put Amazon in a position to outpace overseas competitors when responding to fast-fashion trends.
And finally, with President-elect Donald Trump publicly blasting Silicon Valley, and threatening companies who outsource production, it couldn’t hurt for Amazon to have a “Made in America” product line of its own.
You can read more about the potential acquisition at Bloomberg.
