American Apparel, Inc. (Amex: APP) announced that on May 9, 2008 it completed an asset purchase agreement with U.S. Dyeing & Finishing, Inc. to purchase the assets of a fabric dyeing and finishing facility for approximately $3.8 million. American Apparel funded the purchase price through cash on hand.

The facility, located in Garden Grove, California, has performed contract work for American Apparel for approximately ten years. The purchased assets include machinery and equipment related to fabric dyeing and finishing, including industrial dyers, washers, compressors, and boilers. American Apparel also assumed the lease for two adjacent buildings totalling approximately 135,000 square feet.

Marty Bailey, Chief Manufacturing Officer of American Apparel, stated: "The purchase of U.S. Dyeing & Finishing is an important addition to American Apparel's production capacity. While American Apparel already operates one of the largest cut and-sew operations of its kind, this acquisition will further reduce our reliance on contract dye facilities, allowing us to expand our product offering, streamline our supply chain, lower costs, and ensure better quality control. We are pleased to welcome the manufacturing employees of U.S. Dye to the American Apparel family."

With the acquisition of these assets and the additional investments planned at this facility in the future, the company believes it will be able to bring virtually all of its dyeing volume in-house. Approximately 140 manufacturing employees of U.S. Dyeing & Finishing have or will become employees of American Apparel as a result of the acquisition. American Apparel intends to work with the remaining third party customers of U.S. Dye to ensure a smooth transition.

Robert Lee, President of U.S. Dyeing & Finishing stated, "We are grateful for the nearly decade-long partnership we have forged with American Apparel, which has culminated in this transaction. Given American Apparel's progressive track record of taking care of its employees, we are pleased that our workers are becoming employees of American Apparel, a company we are confident has a long and bright future ahead of it."

About American Apparel

American Apparel is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of May 10, 2008, American Apparel employed over 7,000 people and operated 187 retail stores in 15 countries, including the United States, Canada, Mexico, United Kingdom, Belgium, France, Germany, Italy, the Netherlands, Sweden, Switzerland, Israel, Australia, Japan and South Korea. American Apparel also operates a leading wholesale business that supplies high quality T-shirts and other casual wear to distributors and screen printers.