Gildan Activewear Inc. - President and CEO, Glenn Chamandy
President and CEO, Glenn Chamandy
Source: The Globe and Mail
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  • Gildan Activewear (TSX:GIL) has announced that it will shut down all production facilities as global retail continues to fall
  • The company has reported “meaningful deceleration” in demand for imprintables, and is bracing for similar trends in its other channels
  • Gildan’s distribution will remain open, with enough inventory levels to service customers
  • The company will retract its 2020 financial guidance, which did not include COVID-related information at the time
  • Gildan Activewear (TSX:GIL) is currently up 0.68 per cent to $14.81 per share, with a market cap of $2.92 billion

Gildan Activewear (TSX:GIL) has announced that it will shut down all production facilities as global retail continues to fall.

The company owns a range of everyday clothing brands, with 90 per cent of its products made at company-owned factories.

Gildan has reported a “meaningful deceleration” in demand for its imprintables, as a result of new virus-related policies. While its other sales channels remain relatively unaffected so far, Gildan expects that will change over the coming weeks and months.

In today’s announcement, the company predicted “the multitude of recently announced store closures and social distancing measures…will slow retail demand.”

As such, Gildan will close all company-owned manufacturing facilities in order to align current inventory levels with that of demand.

However, the company’s distribution centres will remain open, servicing customers with its existing stock. Gildan also said that it will initiate remote working policies for many of its office staff.

On February 20, the company announced its first quarter and full-year guidance for 2020. Since it did not contain any information regarding COVID-19, Gildan has retracted the guidance and will issue a revised document in due course.

“Gildan is working diligently across all areas of our business to safeguard our people and the continuity of our business, while maintaining support to our customers,” the announcement said.

“We have been able to successfully navigate through difficult times over the years and adapt to changing environments. This gives us confidence that our strong business model, financial position, and resilience will continue to position us well for long-term success as we emerge from the COVID-19 crisis.”

On March 17, Gildan’s management elected to draw down on the remaining portion of its bank credit facility as a precautionary measure. Subsequently, the company now has approximately C$600 million of liquidity.

Gildan Activewear (TSX:GIL) is currently up 0.68 per cent to $14.81 per share at 10:58am EST.

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