Gildan, one of the largest t-shirt blanks companies in the world, and the makers of the traditionally popular Costco Kirkland Undershirt is looking to give Fruit of the Loom a run for it’s money.
Gildan won 70 percent of the North American wholesale screenprint market with a shorter supply chain based in Central America instead of China and steady investment in manufacturing, the company said in a presentation last month. A new $100 million factory in Honduras will begin production by the end of the year that will be $20 million cheaper to run annually and increase production 50 percent by the end of 2013, said Sophie Argiriou, Gildan spokeswoman.
Growing nearly 70% in 2012, Gildan has its sights set on displacing Fruit of the Looms’ and Hanes innerwear business by streamlining their operations, reducing manufacturing costs, and extending those savings to the retailers. Providing those stores with higher margins is the name of the game for Gildan.
Gildan’s Chamandy said underwear is one of the hardest consumer markets to break into because people are often loyal to their brands. He said aggressive pricing will overcome this.
With Gildan’s 2011 purchase of Gold Toe (Socks), it provided them with immediate access to four of the largest big-box retailers including Walmart and Target. This new retail reach gives them the opening to potentially introduce it’s own innerwear line into those retailers.
Think of it, wouldn’t it be cool to be able to get Kirkland-like T-shirts at Walmart or Target? Looks like Gildan will be coming up with a handful of new white-label/house brand names for these retailers in the not-too-distant future.
Granted, it might not be that easy for Gildan to compete with Hanes in the underwear market. Mind-share has a lot to do with what us consumers buy, and Hanes clearly is the dominant player.
But, it wouldn’t surprise me if we see Gildan working to replace the secondary innerwear brands currently at major retailers. At Walmart, I could see Gildan displacing Faded Glory. At Target, maybe the Merona brand underwear?
What actually might happen might be totally transparent to us too. The retailers might just start using Gildan to produce their existing house-brand innerwear products.
Let’s see what happens in 2013!