About Gildan Activewear

Gildan Activewear Inc. (Gildan) operates as a vertically integrated manufacturer of everyday basic apparel, including activewear, underwear, and hosiery products. The company’s products are sold to wholesale distributors, screenprinters and embellishers in North America, Europe, the Asia-Pacific, and Latin America, as well as to retailers in North America, including mass merchants, department stores, national chains, specialty retailers, craft stores and online retailers. The company also manufactures products for global lifestyle brand companies who market these products under their own brands through their own retail establishments, e-commerce platforms, and/or to third-party retailers. Brands, Products, and Customers The products the company manufactures and sells are marketed under company brands, including Gildan, American Apparel, Comfort Colors, Gildan Hammer, Alstyle and GoldToe. Further, the company manufactures for and supplies products to select leading global athletic and lifestyle brands, as well as to certain retail customers who market these products under their own exclusive brands. The company also sells sock products under the Under Armour brand through a sock licensing agreement, for exclusive distribution in the United States and Canada. The company’s primary product categories include activewear tops and bottoms (activewear), socks (hosiery), and underwear tops and bottoms (underwear). The company sells its activewear products primarily in ‘blank’ or undecorated form, without imprints or embellishment. The majority of the company’s activewear sales are derived from activewear sold to wholesale distributors in the imprintables channels in North America and internationally. These wholesale distributors then sell the blank garments to screenprinters/embellishers who decorate the products with designs and logos, and who in turn sell the embellished/imprinted activewear into a highly diversified range of end-use markets. These include educational institutions, athletic dealers, event merchandisers, promotional product distributors, charitable organizations, entertainment promoters, travel and tourism venues, and retailers. The activewear products have diverse applications, such as serving as work or school uniforms or athletic team wear or simply conveying individual, group, and team identity. The company also sells activewear products in blank form directly to various retailers, or through national accounts servicing retailers, in addition to underwear and socks for men, ladies, and kids. These retailers include mass merchants, department stores, national chains, sports specialty stores, craft stores, food and drug retailers, dollar stores, and price clubs, all of which sell to consumers through their brick and mortar outlets and/or their e-commerce platforms. Additionally, the company sells to pure-play online retailers who sell to consumers. The company also manufactures for and sells to select leading global athletic and lifestyle consumer brand companies who distribute these products within the retail channel through their own retail establishments, e-commerce platforms, and/or through third-party retailers. Sales, Marketing, and Distribution The company’s global sales and marketing office is located in Christ Church, Barbados, out of which it has established customer-related functions, including sales management, marketing, customer service, credit management, sales forecasting, production planning, inventory control and logistics, as well as supporting finance, human resources and information technology functions. The company also maintains sales support offices in the U.S. The company has established extensive distribution operations primarily through internally managed and operated large distribution centers and some smaller facilities in the U.S., as well as a large distribution facility in Honduras. To supplement some of its distribution needs, the company also uses third-party warehouses in North America, Europe, and Asia. Customers The company sells its activewear, underwear, socks, hosiery, and legwear products to a broad range of customers, including wholesale distributors, screenprinters or embellishers, as well as to retailers that sell to consumers through their physical stores and/or e-commerce platforms. In the imprintables channel it sells its products in over 60 countries across North America, Europe, the Asia-Pacific region and Latin America, primarily to wholesale distributors and to a lesser extent to large screenprinters or embellishers. The company’s products in the North American retail channel are sold to a broad spectrum of retailers, including mass merchants, department stores, national and regional chains, sports specialty stores, craft stores, food and drug retailers, dollar stores and price clubs, all of which sell to consumers through their brick and mortar outlets and/or their e-commerce platforms. Additionally, the company sells to pure-play online retailers who sell to consumers. The company also manufactures for and sells to select leading global athletic and lifestyle consumer brand companies who distribute these products within the retail channel through their own retail establishments, e-commerce platforms, and/or through third-party retailers. Seasonality While its products are sold on a year-round basis, the company’s business experiences seasonal changes in demand which result in quarterly fluctuations in operating results. Historically, demand for T-shirts is lowest in the fourth quarter and highest in the second quarter (year ended January 2023) of the year, when distributors purchase inventory for the peak summer selling season. Historically, demand for fleece is typically highest in advance of the fall and winter seasons, in the second and third quarters of the year. Sales of hosiery and underwear are typically higher during the second half of the year, during the back-to-school period and the Christmas holiday selling season. These seasonal sales trends of the company’s business also result in fluctuations in its inventory levels throughout the year. Strategy The key elements of the company’s strategy include leveraging its strong competitive advantage as a vertically integrated manufacturer as it executes on well-defined plans to expand its global production capacity to support its long-term growth plans; driving leadership in innovation across the organization and all areas of operations aimed at delivering high-quality, value-driven products, increased speed-to-market, and a reduced environmental footprint; and further increasing its Environmental, Social and Governance (ESG) focus across all operations and leveraging its strong ESG standing and progress to enhance its value proposition to all its stakeholders. Trade Regulation The company relies on a number of preferential trade programs which provide duty free access to the U.S. market for goods meeting specified rules of origin, including the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), the Caribbean Basin Trade Partnership Act (CBTPA), and the Haiti Economic Lift Program (HELP) previously referred to as the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE). Customer Product Safety Regulation In the United States, the company is subject to the Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, the Federal Hazardous Substances Act, the Flammable Fabrics Act, the Toxic Substances Control Act, and associated rules and regulations. In Canada, the company is subject to similar laws and regulations, including the Hazardous Products Act and the Canada Consumer Product Safety Act. In the European Union, it is also subject to the General Product Safety Directive and the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), which places responsibility on all manufacturers to identify and manage the risks that chemical substances may pose to human health and to the environment. Intellectual Property The company owns a large portfolio of trademarks covering, among others, the Gildan, GoldToe, Comfort Colors, Peds and American Apparel families of brands, with trademarks registered in Canada, in the U.S. and in many other countries where its products are manufactured and/or sold. The company also has licenses for the use of third-party intellectual property, including for example an exclusive license for the manufacturing and use of the Under Armour trademark in connection with branded socks distribution in the U.S. and Canada. Competition The company faces competition from large and smaller U.S.-based and foreign manufacturers or suppliers of basic family apparel. Among the larger competing North American-based manufacturers are Hanesbrands Inc., as well as Fruit of the Loom, Inc., a subsidiary of Berkshire Hathaway Inc. which competes through its own brand offerings and those of its subsidiary, Russell Corporation. These companies manufacture out of some of the same geographies as Gildan and compete primarily within the same basic apparel product categories in similar channels of distribution in North America and international markets. In socks and underwear, the company’s competitors also include Renfro Corporation; Jockey International, Inc.; and Kayser Roth Corporation. In addition, the company competes with smaller U.S.-based companies selling to or operating as wholesale distributors of imprintables activewear products, including Next Level Apparel; Color Image Apparel, Inc. (owner of the Bella + Canvas brand); and Delta Apparel Inc., as well as Central American and Mexican manufacturers that supply products in the imprintables channel. History The company was founded in 1946. It was incorporated in 1984 pursuant to the Canada Business Corporations Act. The company was formerly known as Textiles Gildan Inc. and changed its name to Gildan Activewear Inc. in 1995.