Purchase of Comfort Colors expected to help Montreal-based company go after younger consumers.
MONTREAL — Gildan Activewear is targeting the college crowd by paying US$100 million to acquire the leading supplier of garment-dyed T-shirts and sweatshirts for the North American printwear market.
The Montreal-based company said the purchase of Vermont’s Comfort Colors, which has US$95 million of annual sales, will complement its own efforts to go after younger consumers.
“It’s been a success story in our industry,” CEO Glenn Chamandy said Wednesday after announcing the deal and Gildan’s quarterly results.
“The college kids are basically really raving about this type of product,” he told analysts.
Comfort Colors dyes blank shirts sold by Gildan and other suppliers into a garment with a weathered look that is also popular with resorts and bookstores.
Comfort Colors sales, which are distributed through many of the same locations as Gildan, have increased 20% annually over the last four years. Chamandy said the biggest challenge will be to produce enough product because capacity is constantly sold out.
He also sees growth opportunities in Canada and Europe because all of Comfort Colors’ sales are in the US.
Gildan said it lost US$41.2 million in the fourth quarter, surprising analyst who had expected a profit.
Sales decreased 13.5% to US$390.6 million as lower revenues from T-shirts sold to printers was partially offset by 20% growth in Gildan-branded products.
Gildan also said it has signed country music superstar Blake Shelton as an “all-American” pitchman as it seeks to grow its market share to more than 10%. Its market share was 6.2% in the last quarter, double that of the prior year.
Gildan plans to spend an extra US$15 million next year to promote its branded product by using Shelton in advertising campaigns.