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Gildan Made Smart Choice When Buying Kentucky Derby Hosiery

Wednesday 11th of July 2007 07:58:37 PM

Last year, Gildan, Inc. purchased Kentucky Derby Hosiery and began supplying US retail chain Wal-mart with socks and other items. They payoff has been good for Gildan, who has started breaking into the retail distribution market with their own line of T-Shirts and active wear in addition to athletic socks and underwear to other retailers after proving it could keep up with the demands of larger retailer such as Wal-mart in addition to its role as a wholesale supplier of Blank T-Shirts used by other companies. "We'll always remain focused on serving our wholesale customers. It's our core business. But we're planning to develop a second core business in the mass market retail channel," said Gildan's chief financial and administrative officer, Laurence Sellyn.

Buying Kentucky Derby Hosiery was Gildan's first step in becoming known in the retail distribution business. "It was a very small acquisition in terms of dollars, but it was very strategic acquisition. They have a long history of supplying major retailers. We felt we could benefit from their distribution and their relationships with retailers to accelerate our entry into mass market retailing. The Kentucky Derby acquisition has opened the door for Gildan to get into retail. Gildan is still at the early stages in the retail business. Kentucky Derby has about 10% of the retail sales volume of socks sold in the U.S. They basically permitted Gildan to gain a wealth of experience," said Sellyn. After buying the company, Gildan relocated the factory overseas.

Because of the deal between Kentucky Derby Hosiery and Wal-mart, Gildan was able to break into the market easily. "We're looking at potentially doing more acquisitions to support our growth strategy," said Sellyn. Many in the industry are hopeful that Gildan will be able to continue its success.

(c)Katie Waybill, www.sxc.hu