Gildan buys Comfort Colors as Q4 loss reaches $41.2m
- Gildan acquires Comfort Colors for $100m
- Company swings to Q4 loss of $41.2m
- Sales drop 13.5% to $390.6m
Comfort Colors supplies garment-dyed and undecorated T-shirts and sweatshirts
Apparel business Gildan Activewear has paid US$100m to acquire Comfort Colors, a supplier of garment-dyed and undecorated T-shirts and sweatshirts.
The deal, expected to close in the first quarter of 2014, forms part of Gildan’s strategy to increased its penetration of the fashion basics segment of the North American printwear market.
Gildan said Comfort Colors was one of the most recognised brands in college bookstores, speciality retail stores, destination and resort shops.
The company, which has its headquarters in Vermont and packaging and distribution facilities in Vermont and Massachusetts, had net sales of $95m in 2014, and is an existing customer of Gildan.
Meanwhile, Gildan said it had slipped to a net loss of $41.2m in the fourth quarter, versus a profit last year of $41.7m. Sales had dipped 13.5% to $390.6m in the three months to 4 January, the company added, thanks to lower printwear sales, partially offset by 20%-plus growth in branded apparel.
The overall downturn came about primarily because of strategic pricing actions in printwear, with Gildan lowering its base selling prices significantly and simplifying its discount structure.
For 2015, Gildan expects net sales of just over $2.65bn and adjusted diluted earnings per share of $3.00-3.15.
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