Blank T-shirt maker pins growth hopes on retail branding

MONTREAL — The Globe and Mail

The Montreal-based company has been on an advertising and marketing tear, flogging its own lines of Gildan-branded apparel – including socks, underwear and fleece – at the retail level. (CHRISTINNE MUSCHI FOR THE GLOBE AND MAIL)

Gildan Activewear Inc., the low-cost manufacturer of blank T-shirts that are then imprinted with logos, slogans and designs for everything from rock concerts to company picnics, wants some brand-name recognition.

The Montreal-based company has been on an advertising and marketing tear, flogging its own lines of Gildan-branded apparel – including socks, underwear and fleece – at the retail level.

Story continues below ad

In 2013 alone, Gildan earmarked $30-million (U.S.) for a big ad push to get its little-known name into the head of the average consumer.

Is it working? Investors will be keen to find out when Gildan unveils its fourth-quarter results Nov. 21.

Gildan chief executive Glenn Chamandy and his team are likely to provide an update, heading into the 2014 fiscal year, on the retail branding program, an initiative the company is betting will be a major source of growth.

One key detail to watch for is how Gildan is doing clinching crucial shelf space in big retailers such as Wal-Mart stores.

“With the print-wear business seemingly stable from a market share and demand growth perspective, the key variable for 2014 growth potential appears to be manufacturing capacity and consumer adoption of new Gildan branded retail programs,” D.A. Davidson & Co. analyst Andrew Burns said in a recent research note.

“We continue to believe that new retail programs present both increased execution risk and upside potential depending how sell-through trends ramp,” he wrote.

“With Gildan’s future growth goals heavily reliant on retail program growth, we are looking for further details on how consumers are adopting Gildan branded programs.”

Chase Bethel of Desjardins Securities said Gildan’s branded retail program in Wal-Marts has been strong so far.

The “announcement of new programs with other retailers and/or increased shelf space allocation at Wal-Mart would be expected to boost Gildan’s shares,” he said in a recent note.

Mr. Bethel and Mr. Burns are each estimating fourth-quarter earnings-per-share of 84 cents. The analysts’ consensus estimate is 83 cents.

Follow on Twitter: @globemontreal

Companies & investments Mentioned In This Article (2)

Company Price Change Volume
Gildan Activewear
GIL-N
60.06 -0.858 % 93,273
Gildan Activewear
GIL-T
64.45 -0.907 % 163,271

Topics: