Gildan eyes private-label deals with major retailers

MONTREAL Gildan Activewear Inc. is eyeing opportunities to build a private label business for its activewear products as large U.S. retailers shift their strategy to offset the threat from Amazon.

The Montreal-based maker of apparel, including T-shirts, socks and underwear says Walmart, Target and other large retailers are moving to carry more house brand apparel with low prices.

Gildan exited the private label socks business and has never made private label outerwear.

Chief executive Glenn Chamandy said providing private label activewear would complement its strategy to sell branded products such as American Apparel, Comfort Colors and Anvil.

“This icing on the cake that will allow us to basically continue to fill in and add opportunities as we complement all of our other strategies as we go forward,” he said in an interview.

The large retailers are moving more to private label products in a bid to attract customers who may shop at online sites like Amazon.

“We’re still going to have a combination of selling our brands at the same time as providing selectively private label to them if we choose to do it and that just gives us a different way of achieving our goal.”

Chamandy wouldn’t say how much revenue these deals could generate, saying the company will consider each opportunity individually based on its available production capacity and generated margins. No shipments are expected in 2018.

“We have so much momentum in our core business right now and our point of sale is so strong that we’re completely in a sold-out position right now,” he said, adding it is expanding existing plants and building a new one in Honduras.