US: Gildan to buy sock maker Gold Toe Moretz for $350m
Sock maker Gold Toe Moretz has been bought by Gildan Activewear
Basic apparel maker Gildan Activewear Inc is adding to its line-up after agreeing to buy sock supplier Gold Toe Moretz Holdings Corp for US$350m.
The deal, announced by Montreal, Canada-based Gildan yesterday (11 April), is described as "an important and exciting step in Gildan's ongoing strategic development," by its president and CEO Glenn Chamandy.
The acquisition will more than double Gildan's current sock revenues and will allow the company to expand into new retail channels within the US.
Revenues reported by Gold Toe Moretz for the year ended 31 December 2010 were US$280m, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came to US$48.6m.
Gildan also sees opportunities to boost its sales in socks and other retail product categories by developing Gold Toe Moretz's owned and licensed brands. And it believes cost savings of US$10-$15m a year are achievable.
Gold Toe Moretz supplies branded athletic, casual and dress socks for mass-market retailers, national chains, price clubs, department stores and specialty sporting goods stores in the US.
The company's senior management team, including chairman and chief innovation officer John Moretz, and president and CEO Steve Lineberger will stay with the company.
"In addition to the introduction of leading consumer brands, the acquisition provides Gildan with enhanced brand management experience and expertise, best-in-class merchandising and strong technical innovation and design capabilities," Chamandy explains, adding this complements "Gildan's existing competitive strengths for retail.
"These capabilities can also be utilised to further the development of our own Gildan brand."
With over 28,000 employees worldwide, Gildan owns and operates large-scale production facilities in Central America and the Caribbean Basin and is also developing a manufacturing hub in Bangladesh to support its planned growth in Asia and Europe.
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