Gildan Activewear

Gildan Activewear Inc.

Type	Public
Traded as	TSX: GIL NYSE: GIL S&P/TSX 60 component
Industry	Textile, Clothing
Founded	1984
Founder	Glenn Chamandy, Greg Chamandy
Headquarters	Montreal, Quebec, Canada
Key people	Glenn J. Chamandy (CEO), Laurence G. Sellyn (CFO)
Revenue	US$ 1.95 billion (FY 2012)[1]
Operating income	US$ 155.1 million (FY 2012)[1]
Net income	US$ 148.5 million (FY 2012)[1]
Total assets	US$ 1.9 billion (FY 2012)[1]
Total equity	US$ 1.43 billion (FY 2012)[1]
Number of employees	33,000 (2013)[1]
Subsidiaries	Anvil Knitwear
Website	www.gildan.com

Gildan Activewear Inc. is a manufacturer and marketer of branded clothing, including undecorated blank activewear such as t-shirts, sport shirts and fleeces, which are subsequently decorated by screen printing companies with designs and logos. The company also supplies branded and private label athletic, casual and dress socks to retail companies in the U.S.^[2] including Gold Toe Brands, PowerSox, SilverToe, Auro, All Pro, and the Gildan brand.^[3] The company also manufactures and distributes Under Armour and New Balance brand socks.^[4] The company has approximately 33,000 employees worldwide,^[1] and owns and operates manufacturing facilities in Central America and the Caribbean Basin.

Founding

Glenn and Greg Chamandy founded Gildan in 1984 with the acquisition of a knitting mill in Montreal, Canada.^[5]

Gildan Textiles Inc. was founded to make fabric to supply the family childrenswear business, Harley Inc. It later expanded to sell t-shirts made of 100% cotton to wholesalers, which resold them to U.S. and Canadian screen-printers, to be decorated with designs and logos. By 1994, Harley was closed in order to focus on the expansion of what had become Gildan Activewear.^[6]

The combination of low wages and advanced technology has allowed Gildan to lower its price per shirt to below that of Chinese manufacturers.^[7]

Gildan opened its first off-shore sewing facility in San Pedro Sula, Honduras, in 1997. The plant was vertically integrated and employed 1,200 workers. Over the next year, the company worked towards an IPO and was listed publicly on both the Toronto and American Stock Exchanges (TSX, AMEX). Gildan transferred its US listing from AMEX to the New York Stock Exchange in September 1999.^[7]

By 2001, Gildan was the leading distributor of 100% cotton T-shirts in the US as determined by the ACNielsen S.T.A.R.S. Report. The next year, the company opened a knitting, bleaching, dyeing, finishing and cutting facility in Rio Nance, Honduras.^[7]

Over the next few years, Gildan continued its expansion by opening sewing facilities in Nicaragua and the Dominican Republic and a distribution center in Charleston, South Carolina.^[8]

In 2010 the company invested $15m in Shahriyar Fabric Industries Limited in Bangladesh to support planned growth in Asia and Europe.^[9]

Gildan bought Gold Toe Moretz, a North Carolina-based sock manufacturer, in early 2011. Previously, Gildan had primarily focused on its activewear market share, and had started entering the retail channel with the acquisitions of two sock manufacturers. The Gold Toe acquisition doubled the company’s sock revenue.^[10]

In May 2012, Gildan again expanded with its purchase of 130-year old apparel maker Anvil Holdings, Inc., the parent company of Anvil Knitwear and producer of environmentally-friendly lines of sustainable, recycled and organic apparel.

Gildan bought a 30-second spot to air an advertisement during the third quarter of the 2013 Super Bowl. The ad was part of an overall $25 million marketing push created by DeVito/Verdi, which included broadcast, print, digital, event marketing, and public relations. Gildan started speaking to the media about its Super Bowl ad in early December 2012.^[11]

The company also sponsored the Gildan New Mexico Bowl, which was played December 15, 2012 in Albuquerque.^[12]

Environment and sustainability

In the past decade, Gildan implemented sustainability initiatives to reduce or eliminate potentially negative effects its facilities might have on the environment. Facilities in Honduras and the Dominican Republic employ Biotop, a biological wastewater management system that uses gravity, microorganisms and sunlight to remove chemicals and dyes from wastewater.^[13] When treated by Biotop, the water is beneficial to nearby ecosystems and suitable for use in local agriculture. ^[14]

Exploitative labor practices

2002

Worker rights abuses and forced pregnancy testing

On January 22, 2002, CBC News: Disclosure ran a segment entitled “Sewing Discontent” in which Honduran employees of Gildan Activewear accused the Quebec-based T-shirt manufacturer of a number of worker rights abuses, including:

• Excessively high production quotas;
• Eleven hour work days;
• Wages of Cdn$16 (US$10.52) a day that didn’t meet workers’ basic needs;
• Supervised bathroom breaks to limit workers’ use of the facilities;
• Poor air quality – air filled with fabric dust;
• Firings of workers attempting to organize; and
• Forced pregnancy testing, and firings of workers found to be pregnant.^[15]

2004

Unlawful Mass termination

The unlawful mass termination of workers at Gildan’s plant in El Progreso, Honduras, in August 2004 was followed by Gildan Activewear’s compliance with a priority rehire agreement reached in 2005 with the Worker Rights Consortium. However, after investigation, a December 2006 Update Report by the Worker Rights Consortium found that Gildan did not comply with the agreement during a key early stage of implementation.^[16]

2008

Verbal, physical, and sexual abuse

Star S.A. is an apparel manufacturing facility in Honduras that is disclosed as a producer of collegiate apparel for licensees Nike, New Agenda, and VF Imagewear. Star S.A. is owned by Gildan, which acquired the factory as part of its purchase of Anvil Knitwear on May 3, 2012. In 2008, a factory investigation found that workers facing verbal, physical, and sexual abuse were fired when they tried to unionize.^[17]

2011

Allegations of labor rights violations

In a January 20, 2011 investigation report, the Worker Rights Consortium has identified serious and ongoing violations by Gildan of workers’ associational rights.^[18] These violations include, most significantly:

• Systematic threats of termination and blacklisting of workers by Gildan management that were designed to destroy efforts by workers to organize an independent union. In some cases, managers threatened not only to terminate the workers, but also to ensure that they would be unable to find other employment – i.e., that they would be blacklisted and therefore unable to support their families;
• When these actions failed to thwart the unionization drive, collusion by Gildan management with an unrepresentative labor organization to put in place an illegitimate collective bargaining agreement, as a means of avoiding having to bargain with workers’ freely chosen representatives;
• The retaliatory dismissal of seven union members, and the attempted retaliatory dismissal of a union leader, based on transparently pretextual grounds;

Genesis, S.A. is a Haitian factory manufacturing T-shirts whose main customer is Gildan Activewear. It has been accused as the most serious offender in a campaign of retaliatory dismissals, targeted at the leaders of a new labor rights and union organizing effort in Port-au-Prince.^[19]

Harshest working conditions in the global apparel industry^[20]

Genesis, S.A. is a Haitian factory manufacturing T-shirts and its only customer is Gildan Activewear.^[21] Genesis, S.A. has been the most serious offender in a multi-factory campaign of retaliatory dismissals, targeted at the leaders of a new labor rights and union organizing effort in Haiti’s capital, Port-au-Prince. Haitian apparel workers receive the lowest wages in the hemisphere and face some of the harshest working conditions anywhere in the global apparel industry.[7]

2012

Violence and death threats

An investigation^[22] between May and October 2012 at the same factory owned by Gildan was conducted by Worker Rights Consortium and describes two sets of allegations made by Star workers. First, workers alleged that management gave tacit approval and/or engaged in active collusion vis-à-vis threats of violence and acts of harassment against members and leaders of the union. Second, workers alleged that Star management violated the collective bargaining agreement and Honduran law by refusing to share information with the union about policy changes at the factory that affect workers.

In the words of the International Trade Union Confederation (ITUC), “Being a trade unionist...implies major risks in the Honduras of today.”^[23] Honduras has the highest murder rate in the world^[24] and groups such as the European Union and Amnesty International have documented a disturbing rate of targeted murders, assaults, and rapes against human rights defenders, including labor union leaders and activists.^[22]

In addition to the explicit threats described above, union leaders alleged that had been subjected to repeated threats of violence, including death threats.^[22][25]

2013

WRC Report: Stealing from the Poor: Wage Theft in the Haitian Apparel Industry

Gildan Activewear (along with other top t-shirt manufacturers like Gildan and Hanes) is named as one of the main culprits in a Worker Rights Consortium report released in October 2013.^[26] The document details the working conditions and prevalent wage theft in the garment industry in the Republic of Haiti, a country victim of the devastating 2010 Haiti earthquake. This report, titled "Stealing from the Poor: Wage Theft in the Haitian Apparel Industry," highlights the fact that the "average wages are even lower at the new Caracol Industrial Park despite the fact that the project was heavily subsidized by the United States government with earthquake recovery aid as a means of providing Haitian workers with a path out of poverty."^[27]

Legal disputes

2001 - Stolen Fruit of the Loom strategic confidential documents

In April 2001, one of Gildan’s competitors, Fruit of the Loom (FTL), launched a lawsuit, alleging that Gildan had stolen its top-secret strategic document “Plan Sew” and had hired away key executives to gain unfair competitive advantage. FTL was on the defensive after its poor performance in an ongoing pricing war initiated by the arrival of Gildan in the US marketplace in 1997. By the end of 1999, FTL had filed for Chapter 11 bankruptcy in the US. The lawsuit was subsequently stayed by mutual agreement between the two companies. Gildan even attempted to buy out the faltering company, but Fruit of the Loom was eventually purchased by Berkshire Hathaway Inc.^[28]

2012 - Gildan rebranded FOL product to land the Dollar General Business

After replacing Russell Brands, an affiliate of Fruit of the Loom, as a supplier of men's and boys' fleece shirts to Dollar General, Gildan was sued for trademark infringement and unfair competition. The Company allegedly switched the labels on its Jerzees' brand clothing to its own Gildan label. As part of winning the contract to supply Dollar General with Gildan's Smart Basics label, Gildan was required to buy roughly $1 million worth of Jerzees' inventory. Gildan says about $100,000 worth of Russell Brands Jerzees' clothing carried by Dollar General was "inadvertently" relabeled and sold as Gildan brand clothing. In response, the company said it was taking all necessary steps to determine and avoid a repeat of the mix-up through its Chief Financial Officer, who also affirmed it was conducting an internal review to determine how the error occurred at one of its distribution centers in the United States, even if the value of the products was not material. ^[29]

Corporate citizenship

In 1994 Gildan became the first wholesale activewear manufacturer to obtain the Oeko-tex standard 100 Certification.^[30] Oeko-Tex is a set of uniform safety standards within the textile industry; certification ensures that processes and final products have been tested for harmful substances and found to contain amounts lower than Oeko-Tex’s set limits.

Gildan has its own Social Compliance Program designed to enforce humane standards for working conditions and labor practices.^[31] Facilities, including those of external suppliers, are audited for compliance with Gildan’s internal Code of Conduct and adherence to standards of the Worldwide Responsible Accredited Production (WRAP).

Gildan was also the first basic activewear manufacturer to be accredited by the FLA. Audits are also performed to ensure compliance with standards of the Fair Labor Association (FLA).^[32]

Gildan established medical clinics in its manufacturing facilities that offer free care to employees – for work related accidents as well as non-work related preventative care, including basic prenatal doctor’s visits.^[32] Maclean's Magazine cites this as a factor in naming Gildan to its list of Canada’s 50 Best Corporate Citizens.^[33]

In 2010-2011, Gildan purchased 85% of non-yarn supplies locally in Central America and 76.5% in the Caribbean Basin.^[34]

You can visit Gildan's Corporate Citizenship page at www.genuinegildan.com

Philanthropy

The company launched “I Support...Charity” in 2010 in an effort to promote community involvement and employee participation in choosing the charities that received donations. According to a company press release, Gildan donated $200,000 to various charities as a part of the program in 2011.^[14]

Homeboy Industries, which provides employment and services for at-risk and formerly gang-affiliated youth, received a donation of $100,000 as a result of Gildan’s first “I Support... Charity” campaign.^[35]

In 2011, the second year of the “I Support” program, Gildan added a new feature called Gildan Good Cards. The cards can be redeemed for a $50 donation to any 501(c)(3) charity and are given to employees who nominate a charity. The Good Cards have the effect of dispersing the company’s philanthropic efforts; while only five nominated charities receive large donations, more than 90 charitable organizations benefitted from Good Card redemptions. The cards resulted in an extra $100,000 distributed among the 90+ additional philanthropies.^[36]

References

External links

• Official website
• Anvil Knitwear official website

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