We’ve added Gildan Activewear to our Key stocks. It gives you a manufacturer, of which the Canadian market has relatively few.
Gildan manufactures family apparel including sports shirts, T-shirts, fleece, socks and underwear. It distributes its consumer goods products across Canada and the U.S. The company is also expanding overseas. In the first quarter of fiscal 2014, for instance, international sales volumes jumped by 31.2 per cent. That was much faster than overall sales volume growth of 5.9 per cent from last year’s first quarter.
To keep its labor costs down and remain competitive, Gildan manufactures mostly in Central America (such as Honduras), the Caribbean (such as the Dominican Republic and the U.S. South (such as North Carolina).
Gildan’s facilities have avoided disasters such as the fire that killed workers in Bangladesh. The wages are significantly lower than what the company would pay in Canada, of course. Still, the cash is likely welcome. Dollars usually go further in developing countries.