T-SHIRT MAKER SEES A SILVER LINING IN ASIAN CLOUDS

MONTREAL— Gildan Activewear hopes to become an outsourcing supplier of choice to major clothing branded companies worried about poor working conditions in Asia.

The apparel company said Thursday that its growing facilities in Honduras can lure companies that are looking to repatriate their production to the Western Hemisphere following a building collapse in Bangladesh last week that killed more than 400.

“The last thing in the world they want is for their brands to be compromised or tainted by sourcing from suppliers that don’t have proper working conditions,” chief administrative and financial officer Laurence Sellyn said in an interview.

Gildan already supplies T-shirts to brands such as Nike, Reebok and Adidas following its acquisition of Anvil and hopes to significantly expand that relationship into other apparel products.

“We see that as a base for significant growth (and) potentially becoming a very material part of our business,” Sellyn said.

Virtually debt-free and producing lots of cash, Sellyn said Gildan doesn’t have to cut corners on safety and is able to make capital investments in good working conditions.

By owning its low-cost manufacturing facilities, it has the advantage of being able to control labour practices, production quality and costs.

Although its wages in Honduras are low by western standards, he said they exceed local norms.

The clothing manufacturer, which reports in U.S. dollars, said Thursday it earned $72.3 million or 59 cents per share on a diluted basis for the second quarter ended March 31, exceeding its earlier guidance of 54 to 57 cents per share. Comparable earnings a year ago were $26.9 million or 22 cents per share.

Net sales rose 8.4 per cent to $503 million.

In its outlook, net sales revenue for its 2013 financial year are now projected to be slightly in excess of $2.15 billion, while full-year adjusted earnings per share are expected to come in at between $2.65 and $2.70 — the upper end of its previous guidance range of $2.60 to $2.70 per share.