Gildan Activewear has launched an internal inquiry into the events surrounding a lawsuit filed against it by Russell Brands, part of Fruit of the Loom.

The allegations, including trademark infringement and unfair competition, stem from Gildan winning a supply contract for men’s and boys’ fleeces to a US retail customer.

The contract, previously held by Russell Brands for its Jerzees label, has now passed to the Gildan Smart Basics brand.

However, as part of the terms of obtaining the contract, Gildan said it was obliged to buy a “small amount” of Jerzees inventory from the retailer – some of which was rebranded as Gildan and shipped back to the customer.

“Gildan took immediate steps to correct the situation by seeking to retrieve all of the Jerzees product which had been shipped to the retailer from the customer’s retail outlets and distribution centres,” the company said.

“Gildan is confident that the amount of Jerzees product under dispute is negligible, and estimates that approximately US$100,000 of disputed Jerzees products have been sold to consumers.”

Gildan said it was now conducting an internal review into the matter, which it said it was “treating seriously”.