The Economic Times  Nov 10  Comment 
Williamson Magor Group plans to trasnform EIIL's wholly owned subsidiary Greendale India Ltd (GIL) into a 50:50 JV with both EIIL and McLeod Russel holding 50% shares each.
Benzinga  Nov 3  Comment 
Gildan Activewear Inc (USA) (NYSE: GIL) reported a better-than-expected third-quarter 2017 EPS Thursday, but Stephen MacLeod of BMO Capital Markets decided to downgrade the stock from Outperform to Market Perform and lowered his price target from...


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Business Overview

Gildan Activewear was founded in 1984 in Montreal, Canada and is a vertically-integrated, low-cost manufacturer and marketer of branded basic apparel. The company is the leading supplier of activewear for the wholesale screenprint sportswear market in the United States and Canada.It is also a leading supplier to the European market as well. It is currently establishing a presence in Mexico and the Asia-Pacific region.

The company sells T-shirts, sport shirts and fleece in large quantities to wholesale distributors as undecorated "blanks" that are subsequently decorated by screenprinters with designs and logos. The company's products are utilized in venues such as sports, entertainment, corporate events, travel and tourism as well as work uniforms.

The company also sells athletic socks to retailers in North America and is now leading suppliers of socks in the U.S. mass-market retail channel. Additionally, it has become a main obective to become a significant supplier of men's and boys' underwear and undecorated activewear products to mass-marker retailers in North America.

Gildan Activewear currently staffs over 28,000 full-time employees around the world and is still headquartered in Montreal, Canada. [1]


To deliver better value through better design [2]



Gildan was founded by Glenn Chamandy. The company originally focused its activities on the manufacture of textiles and produced and sold finished fabric as a principal product line.

In 1992, the company refocused its business strategy, and by 1994 was focused on the manufacture and sales of activewear for the wholesale distribution market which is still their main source of revenue today.

The company's initial product line was basic T-shirts, polo shirts and fleece products sold as blanks to the wholesale market to be screenprinted and sold to consumers until 2006.

In June of 2006, the company acquired Kentucky Derby Hosiery, which produced socks, and was the first attempt into the North American mass-market retail channel.

In October of 2007, the company acquired V.I. Prewett & Sons Inc., a manufacturer of basic family socks to U.S. mass-market retailers. These acquisitions expanded the product line beyond just activewear and gave the company its first distribution into the North American mass-market retail which already accounts for 14% of total revenue in just two years.

The company is currently the market share leader. [1]

Management Team

Glenn J. Chamandy President & Chief Executive Officer Glenn J. Chamandy is President and Chief Executive Officer of Gildan Activewear. Mr. Chamandy is one of the founders of the Corporation and has devoted his entire career to building the Corporation into an industry leader.

Michael R. Hoffman President, Gildan Activewear SRL Prior to joining Gildan, Mr. Hoffman was employed by Fruit of the Loom, where he last served as Divisional Vice-President of the Activewear Division.

Georges Sam Yu Sum Executive Vice-President, Operations Before joining Gildan, he held various managerial positions in Manufacturing, Quality Assurance, Fabric Sourcing, Production Planning and Sales at Dominion Textiles, in Montreal, for over 15 years.

Laurence G. Sellyn Executive Vice-President, Chief Financial and Administrative Officer He has previously held the position of Chief Financial Officer and other senior level corporate officer positions with long established Canadian public companies in a variety of industries. Mr. Sellyn is a U.K. Chartered accountant and previously obtained an M.A. from Oxford University.

Benito Masi Executive Vice-President, Manufacturing Benito Masi has been involved in manufacturing in North America for the past 25 years. Before joining the company, he held various positions such as plant manager for an apparel company, and was director and member of the executive board for the Union national du vêtement, textile et autres industries in Montreal.


Company Outlook

Given below is an indept look of the companies outlook in terms of product revenue and financial figures of its competitors and analysis.

Revenue By Product Line




Direct Competitor Comparison
Market Cap: Employees: Qtrly.Rev.Growth (yoy): Revenue (ttm): Gross Margin (ttm): EBITDA (ttm): Operating Margin (ttm): Net Income (ttm): EPS: P/E:
GIL 4.25B 28,000 50.30% 1.42B 26.18% 281.58M 14.77% 206.14M 1.69 22.01
Fruit of the Loom N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
VFC 10.88B 47,000 11.00% 7.70B 46.70% 1.20B 13.28% 571.36M 5.18 19.41
HBI 3.16B 55,500 16.30% 4.33B 32.70% 490.80M 9.34% 211.29M 2.16 15.05
Industry 234.32M 6.20K 2.70% 137.67M 40.93% 44.14M 29.85% N/A .76 5.32
  • Fruit of the Loom is a privately held company by Berkshire Hathaway and its information is not publicly available.


Hanesbrands (HBI)

Hanesbrands manufactures and sells low-cost innerwear including t-shirts, bras and underwear as well as hosiery. Major brands include Hanes, Champion, Playtex and others. The company sells its products to discount retailers like Wal-Mart, Kohls and Target as well as some department stores. [6]

Fruit of the Loom

Fruit of the Loom manufactures underwear, active and casual wear under such labels as Russel, Funpals, Fungals and Underoos. They sell primarly to North American retailers such as Wal-Mark, Target, wholesale clubs and screen printers. It holds the largest market share for branded men's and boy's underwear. Russel Athletic is the leader in team uniforms. [7]

V.F. Corporation

V.F. Coproration is a leading manufacturer in clothing. It holds major brand names in denim, sportwear and outdoor apparel. Some of its major brands include Lee, The North Face and Vans. The company primarily sells its clothing through department stores such as Wal-Mart, Target, and Sears although it does own some of its own department stores. [8]

Marketing Strategy


Gildan Activewear realizes that they operate in a commodity type industry. Because of this, the price of their product is a major indicator of their success. They work hard to keep their costs low so they can offer an inexpensive product to its wholesale distributors and retailers while still achieving significant profits.


Because the company sells "non-fashion" clothing, the company sells its products to wholesale markets around the world for other screen print venues to further customise. The products are then sold in venues such as sporting, entertainment and educational institutions to name a few. The wholesale market is extremely fragmented, with local and regional distributors accounting for the majority of the sales. Because of their low cost, Gildan Activewear can be competitive in major market retailers as well. Targeting low-income shoppers, their products are an attractive option for cost leading stores like Wal-Mart and Target to name a few.


Gildan uses its website and sales team to reach out to mass distributors. Because this is where the majority of their sales come from, Gildan does not have a need to advertise to the mass public. Because they have recently expanded further into the retail market, they use their cost leadership strategy to penetrate the attention of their customers. It is hopeful that as customers become more accustomed to Gildan Activewear products, customers will be more likely to request Activewear products from screen print venues as well.


The company sells "blank" non-fashion T-shirts, sport shirts, fleece, polos socks and underwear. These products are decorated by screenprinters and then sold to venues to be purchased by customers. With their new acquisition of Kentucky Derby Hosiery in 2006, Gildan Activewear has evolved to begin selling activewear, socks and underwear direcly to retailers while beginning to build their brand name directly with customers.


  • Gildan fabric


S.W.O.T. Analysis


Gildan Activewear enjoys a competitive cost advantage as their achieved economies of scale due to their own manufacturing plants in Handuras and the Dominican Republic and large volume of production helps lower their input costs. They offer preferred products with their combination of quality and cost for most screen printers which is crucial because the industry is primarily cost driven.


Gildan brands are not a relatively well-known brand such as Hanes and Fruit of the Loom. Customers are often unaware that they own Gildan brand products because they are often screen printed with other customer customized logos or slogans. This can make it more challenging to penetrate retail markets. Gildan Activewear has set out to resolve this issue by courting more major retailers such as Wal-Mart and Target and has started to place its brand name for display at these retailers.


During 2009, the company began shipping directly to retailers with the acquisitions of two sock manufacturers, Kentucky Derby Hosiery and V.I. Prewit & Sons Inc. Currently, Gildan's main focus is selling socks and underwear to regional retailers and mass merchandisers such as Walmart, Target and Dollar General. It is expected that the company will continue to expand beyond these retailers. It should prove to be a fruitful decision to put the Gildan brand in front of consumers figuring that as consumers become accustomed to Gildan's products, they'll be more likely to request them from screen print vendors. The sock market at retail is estimated at $1.25 billion. The retail market for underwear is estimated at around $1.5 billion in the United States and the retail market in activewear is estimated to be around $1.25 billion in the United States.


The primary threats to the company include wholesalers cancelling order, issues with new plant openings, tariffs on goods produced in the Carribean, price cuts by competitors and higher cotton costs. As well, apparel is often among the first of consumer discretionay spending to be cut in a down economy. Gildan combats this by keeping its prices ultra low and has refocused efforts to court major retailers such as Wal-Mart that offer better profitability.

International Growth Potential

The company is now selling products in the U.K., Spain, Italy, Germany, Greece, Mexico, Japan, and China. The company purchased a manufacturing facility in Bangladesh in order to be more efficient on the distribution side in China and the surrounding areas. It is clear that the company is in the beginning phases of the international expansion, however this could provide additional growth in the future.h

Industry Outlook

Porter's 5 Forces

Competition of Rivalry

High: There are major players in the basic textile industry with well-known brands. Many of whom have achieved great economies of scale and a strong brand name. The fierce competition forces companies to ensure low costs at every turn to offer inexpensive products.

Power of Suppliers

Low: The suppliers side is dominated by new entrants, particularly from Asia. This has driven down prices. Switching costs are also very low. Forward integration from suppliers is a threat, however.

Power of Buyers

High:The customer has plenty of sources and basic clothing wear is often hard to differentiate in terms of quality or added value among the established leaders. Customers seem to have an average level of brand loyalty (some customers do have a perceived added value to certain brands when it comes to their socks, underwear and undershirts) but can be driven to switch brands with an enticing discount on price. Because prices for these products are naturally low anyway, switching costs are just as low for the customer.

Threat of New Entrants

MediumThere are some new entrants due to low cost of raw materials, but market access is a main limiting force as new entrants often can't compete with existing low prices and established companies who have already built brand names with a high value.

Threat of Substitutes

Low: There seem to be no substitues as everyone needs underwear, socks and basic clothing.

Financial Analysis

Gildan Activewear posted a net income of $198,245 million in FY2010, up from $95,329 million in FY 2009 and $146,350 million in FY 2008. The positive growth in net income is likely to increase as their retail market continues to expand and their sales revenue increases from significantly higher unit sales. However, their EBITA (281.58M) is much lower than their competitors VFC (1.20B) and Hanes (490.80M). This metric provides a level field of comparison of companies and their ability to generate raw cash profits (not to be mistaken with free cash flow). Gildan's low EBITA compared to revenue ($1,311,463) suggests they may have problems with certain expenses such as fixed costs. Gildan should look to reducing its operating costs in the future as they look more towards retail sales and can generate more revenue through e-commerce as their competitors do.

Gildans Net Earnings for FY2011 Q1 were $35.9 million which were up 25.3% from Q1 FY2010. This was actually a record for Q1 earnings. The growth was due to strong sales in revenue despite low activewear finished goods inventories throughout the first quarter. Higher net selling prices were partially offset by higher cotton costs and start-up inefficiencies in distributing and manyfacturing. These ineficiencies negatively impact the companies ability to service sales demand for socks in the peak of the Christmas holiday season and resulted in significantly higher distribution expenses in the first quarter. [10]

Free Cash Flow

Last year, Gildan Activewear generated $174.7 million on net income of $198.2 million giving it a 13.3% turn of its revenue into Free Cash Flow. This is pretty impressive although compared to V.F. Corporation who generated $1.057 million in free cash flow (14.1%) they still are behind. These numbers suggest that Gildans earnings may not be as strong as one could suggest. [11]


Low-Cost Producer

Due to the company's plants in Honduras and the Dominican Republic paired with its focus on basic, high-volume products, Gildan is able to charge lower prices than their competition and still produce strong profits. Management consistently looks for ways to improve productivity levels to remain a step ahead of the competition.

Strong Market Share Positions

Gildans has over 60% market share in the wholesale T-shirt category compared to less than 10% it had in 1998. The company is growing faster than the overall market and should continue to do so due to its competitive strengths. When the company first entered the wholesale distributor market in the United States, Hanes and Fruit of the Loom had over 60% of the market share. Today, these two companies own less than 25% of the market share combined. The market size in North America is around $2.25 billion, while international markets the company is currently penetrating offers the same or greater market potential than the United States.

Annualized Total Returns Chart

S&P Consumer Discretionary 18% 9% 5%
S&P 500 Index 14% 1% 3%
  • The stock has basically performed in line with the Consumer Index in the short term and longer-run as strong sales and earnings growth have been a big driver of the stock price appreciation. The stock has underperformed over the past three years due to the struggles within the industry during the recession and issues with a new plant opening.

Recent News and Analysis

4/11/11: Gildan announces plans to acquire Gold Toe Moretz, which includes the Gold Toe sock brand and exclusive U.S. sock licenses for Under Armour and New Balance brands. Gold Toe had revenues of $280 million and EBITDA of $48.6 million for the year ended December 31, 2010. The acquisition will immediately be a positive impact to earnings, and the company expects the deal to close imminently.

  • This acquisition will provide the company a great avenue to expand and diversify its customer base across U.S. retail channels. Gold Toe's technology and retail expertise should provide the company with an excellent opportunity to expand Gildan branded products at retail. Overall, the company seems to remain well positioned in the long-term to continue driving growth through expansion internationally and at retail.

2/8/11: First-quarter revenues increased 50.3%, with sales of activewear and underwear up 76.7% and socks down 9.3%. Activewear and underwear were strong due to a 66.5% increase in unit volume shipments and a 11.9% increase in average net selling prices, offset slightly by a shift in product mix. The company is experiencing strong growth in international shipments and mass-market retailers. Industry trends continue to improve as the overall U.S. distributor industry experienced 7.9% growth for the quarter. The company actually lost about 1% of market share during the quarter as the lack of inventory and capacity constraints are limiting its ability to keep up with demand.

  • While this is negative in the short term, gains in market share coming later in 2011 as the company's new capacity comes on line can be expected. EPS (excluding charges) were up 25.3% to $0.30, which was a penny ahead of consensus estimates. Earnings growth was up due to improved volumes and higher selling prices were offset somewhat by higher cotton prices and other input costs and inefficiencies within the new sock distribution center in the U.S. The company has cotton commitments for the next two quarters, but still has some left to buy for the fourth quarter. If cotton costs stay at current levels, the company plans to increase prices in the back half of 2011 to help offset the higher cotton prices.


  1. 1.0 1.1 Gildan Business Overview
  2. Gildan Mission
  3. Gildan Management Team
  4. Revenue by Product
  5. Yahoo Finance
  6. Hanesbrands
  7. Fruit of the Loom
  8. V.F. Corporation
  9. gildan fabric
  10. Financial Analysis
  11. Free Cash Flow
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