American Apparel might pull up its Los Angeles roots and head east, sources told the New York Post on Monday.
The privately held retailer is making plans to possibly transition its manufacturing from Los Angeles to North Carolina or Tennessee, where the minimum wage is $7.25, sources close to the company told the Post. The minimum wage will rise to $15 in California by 2020.
The possible move comes after a layoff in April affecting 500 workers as American Apparel started outsourcing its denim production.
American Apparel did not immediately respond to CNBC's request for comment.