NEW YORK — Gildan Activewear Inc. announced on Wednesday it will cut approximately 546 jobs in the United States and Canada, relocating production to Central America and the Caribbean.
The company will close its textile manufacturing facility in Valleyfield, Quebec, in December, which will result in the downsizing of its knitting factory in Montreal. It will also shut its sock manufacturing factories in Mount Airy, N.C., and Hillsville, Va., within the next three to four months.
“The relocation of production capacity to the company’s offshore manufacturing hubs in Central America and the Caribbean Basin is required in order to continue to be cost-competitive against Asian imports and other global producers in the intensely competitive North American apparel industry,” the company said in a release.
Gildan has already made significant investments in its manufacturing plants in Honduras and the Dominican Republic.
In addition to restructuring its manufacturing operations, Gildan also announced it will close its Montreal distribution center at the end of October, with responsibilities being transferred to a third-party logistics firm.
Approximately 155 employees at the Valleyfield facility and 50 employees at the Montreal knitting factory will be affected, and about 335 positions in the United States will be cut. Six employees will lose their jobs with the closure of the distribution center.
Moving production overseas, Gildan expects to report a restructuring charge of about 28 cents per share in the fourth quarter. After the charge, the company projects fourth-quarter earnings of approximately 30 cents a diluted share and full-year earnings of $1.79.
Excluding the restructuring charge and recent Kentucky Derby Hosiery acquisition, the company expects full-year earnings for fiscal 2007 at $2.50, up 21 percent from 2006.
“The projected increase in diluted eps in fiscal 2007 reflects higher unit sales volumes and the impact of manufacturing cost reductions primarily due to the ramp-up of the Dominican Republic textile facility,” the company said in a release.
Gildan said it will continue to evaluate the long-term viability and global competitiveness of its remaining Canadian manufacturing facilities.