Vertical integration works for Gildan
Apparel manufacturer Gildan Activewear has said it is now able to use its vertically integrated supply chain to circumvent the challenges that trade barriers are currently presenting to the global industry.
Montreal-based Gildan is using six spinning mills it has in North Carolina to turn US cotton into yarn.
It then ships the yarn to Honduras for knitting, dyeing, cutting and sewing of garments at a manufacturing complex it runs near San Pedro Sula, in the north of the country. Finished garments are shipping back to the US from there.
Meanwhile, it is using production facilities it runs in Bangladesh to make garments for the Canadian and other international markets.
In recent comments to the Wall Street Journal, Gildan chief executive, Glenn Chamandy, said this change, of using its Central America capacity to supply the US market and its Bangladesh facilities to supply other markets, would have come about eventually anyway. But he said the tariff disputes have accelerated the shift.
Gildan reported revenues of $711.7 million, an increase of 2.3% year on year. Like everyone else, the company is still having to navigate a complex global trading environment, but Mr Chamandy said its vertically integrated set-up is allowing it to avoid the highest tariff rates, keep cost increases down and offer peace of mind to customers.
He added that some customers were already placing orders that will “lock in” their share of Gildan’s capacity for 2026. This has happened earlier than usual, he said.
Image: Garment distribution at a Gildan Activewear facility in Honduras.
