MONTREAL — Gildan Activewear hopes to become an outsourcing supplier of choice to major clothing branded companies worried about poor working conditions in Asia.
The apparel company said Thursday that its growing facilities in Honduras can lure companies that are looking to repatriate their production to the Western Hemisphere following a building collapse in Bangladesh last week that killed more than 400, and a recent fire.
“The last thing in the world they want is for their brands to be compromised or tainted by sourcing from suppliers that don’t have proper working conditions,” chief administrative and financial officer Laurence Sellyn said in an interview.
Gildan already supplies T-shirts to brands such as Nike, Reebok and Addidas following its acquisition of Anvil and hopes to significantly expand that relationship and expand into other apparel products it makes.
However, Sellyn declined to say how much the company expects to increase this business over the next two to three years.
“We see that as a base for significant growth (and) potentially becoming a very material part of our business,” he said.
Gildan is virtually debt-free and producing lots of cash, Sellyn said, so the company doesn’t have to cut corners on safety and is able to make capital investments in good working conditions.
By owning its own low-cost manufacturing facilities, it has the advantage of being able to control labour practices, production quality and costs.
Although its wages in Honduras are low by Western standards, he said they exceed local norms.
Even as it seeks to expand this part of its business, Gildan said it’s very optimistic about the growth potential of its core businesses.
Gildan earned “record results” for the second quarter of its 2013 financial year and is also upgrading its outlook for the year as a whole.