Dive Brief:

• For the first time in American Apparel’s 28-year history, it is manufacturing goods outside of the U.S., in Central America, new owner Gildan Activewear confirmed to the New York Post. "Made in Honduras" and "Made in Nicaragua" labels will begin appearing on clothes this summer, the company said.

• The Central American produced apparel is slated for its wholesale operations. Customers like bands and others in need of events merchandise are more price sensitive than retail customers, a Gildan spokesperson told the Post, adding that the company hasn’t yet decided where to make its retail merchandise.

• Gildan, in January, bought American Apparel at auction for $88 million during its second bankruptcy in little over year. 

Dive Insight:

It’s the end of an era for American Apparel — for over a quarter century, the basics company that staked its reputation on made-in-the-USA manufacturing and edgy marketing.

American Apparel founder Dov Charney over the years was an outspoken defender of immigration rights and touted his company’s sweatshop-free ethos. Yet, his Los Angeles factories — which at one time employed some 6,000 workers — were found to include undocumented workers; That discovery led to a series of expenditures and production delays that contributed to the company’s financial woes.

But Charney has continued to maintain that L.A.-based manufacturing is not only a morally superior approach to garment production, but also a cost-effective one — as long as a retailer keeps a close eye on supply and demand and takes full advantage of local factories’ ability to quickly adjust to production demands. “There’s the argument that it’s ethical — I’m telling you that it’s also cheaper,” Charney told Retail Dive. He said his new company is committed to manufacturing in L.A.

Indeed, Charney, who was ousted from American Apparel in a bitter dispute in 2014, has already begun production in a factory in L.A. for his new venture, Los Angeles Apparel. Meanwhile, Gildan is maintaining an office in the city with some of the same marketing professionals working at American Apparel when they bought the company earlier this year, according to the Post.