258 Jobs on the Line in Gildan North Carolina Facility Closure
Gildan Yarns will shut a North Carolina manufacturing facility by the end of the year, citing efforts to “balance production and inventory levels.”
The vertically integrated Canadian activewear company expects to wind down the Salisbury 1 facility on Dec. 8, human resources director Jim Powers told the state in a letter dated Oct. 11. The 258 Gildan employees impacted by the closure can move to the company’s second Salisbury facility or another plant in Mocksville nearly 17 miles away. Gildan notified the state of the permanent closure in a WARN Notice filed on Oct. 10.
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Powers added that the closure will help Gildan “drive an efficient and competitive manufacturing platform.” The move comes after the company downgraded its full-year outlook when it reported second-quarter results for the three months ended July 29. It now expects revenues to come in flat at best or down in the low single digits. Gildan’s original guidance projected a low single-digit increase.
“While our activewear sales volume was better than expected in the first half, we saw the macro environment impact our activewear product mix unfavorably as we moved through the first half,” according to an Aug. 3 report from Gildan, which owns American Apparel, Comfort Colors, Goldtoe and Peds. “International sales of $118 million were down 10 percent versus the prior-year period. In the hosiery and underwear category, we observed notable strength with sales totaling $264 million, up $18 million over the prior year, or 7 percent, driven by both underwear and sock volume growth. We are benefiting from the expansion and the roll-out of mass retail programs for these products, following a period of inventory adjustments at retailers.”
Earlier this year, basics rival Hanesbrands also announced plans to close an Arkansas facility before Oct. 1, bringing an end to its U.S. cut-and-sew operations. The North Carolina-based owner of brands including Wonderbra, Playtex, Hanes and Maidenform is also shopping the Champion activewear label, though it’s unclear who would want to acquire the struggling hoodies purveyor given the challenging economic climate.
Hanesbrands said it was putting Champion under strategic review after an activist hedge fund attacked the company’s high debt and questioned its leadership under CEO Stephen Bratspies, a Walmart merchandising veteran. It also “reorganized and relocated approximately 250 corporate roles” as part of an effort to save $15 million after cutting jobs earlier this year.
