Saturday, October 25th8.7°C
23888
23372

Gildan Activewear enters women hosiery business with $110 million deal for Doris

MONTREAL - Gildan Activewear is entering the women's pantyhose and leggings business with a $110-million deal to buy Doris Inc. that should help expand sales of its own products.

Doris is the third-largest marketer of hosiery in North America and a market leader in Canada with brands such as Secret, Silks and therapeutic socks, TherapyPlus.

Gildan, which makes underwear, socks and T-shirts for both men and women, said Doris gives it a platform for the retail distribution of its Gildan and Gold Toe brands in Canada and broadens its network in the U.S.

"The purpose of the acquisition is not necessarily to become the biggest sheer manufacturer in the world, it's more the fact that it's going to help us round our product line in the North American markets," CEO Glenn Chamandy said in an interview.

Achieving revenue growth targets could raise the acquisition price by up to $10 million.

About 30 per cent of Doris' US$88 million of annual revenues are in the United States, where it is a relatively small supplier. In Canada, it has about 75 per cent of the market, selling sheer pantyhose, leggings and shapewear.

Doris employs about 400 workers, primarily in Montreal, where it produces its sheer goods. The remaining half of its products, including socks, are imported from suppliers in Asia.

Chamandy said Gildan has no plans to change the sheer production, but outsourced products could be transferred to its facilities in Central America and imported duty-free under a trade agreement with Honduras that is set to receive final political approval in Ottawa.

The Doris sales staff in Toronto and the company's relationships with all the major retailers in Canada should also help the sale of Gildan's own brands, he said. Meanwhile, Gildan's experience with the big U.S. retailers provide opportunities to expand sales of Doris brands south of the border.

Chamandy said Gildan should easily double the sales of Doris products and help expand the reach of its own branded underwear, T-shirts and socks.

"We have significant growth opportunities as a company and this is only going to help expedite that growth potential."

Gildan's Gold Toe brand will soon make sheer products, while Doris brands could be expanded to make brassieres, Chamandy added.

Analyst Chase Bethel of Desjardins Capital Markets said Thursday the deal is positive and in line with Gildan's strategy and his expectations for expansion.

"From a strategic standpoint, we view the addition of Doris' brand portfolio as complementary as it enables Gildan to better target the women's branded basic apparel market," he wrote in a report.

Analyst Derek Dley of Canaccord Genuity estimates the deal will add five cents per share to Gildan's earnings before any potential revenue savings.

He raised his target price for Gildan's shares to $66 from $64, adding the company is positioned to make further acquisitions over the next 12 months.

"The acquisition of Doris Inc. allows Gildan to further expand its entire branded products platform through the addition of a new product line, and more importantly, new retail relationships."

Shares in Gildan (TSX:GIL) hit an all-time high of $62.64 in early trading. They were up $1.72, or 2.84 per cent, at $62.01 in afternoon trading on the Toronto Stock Exchange.

Follow @RossMarowits on Twitter

The Canadian Press


Read more Business News

23630


Recent Trending




Today's Market
S&P TSX14543.82+56.99
S&P CDNX805.45-3.15
DJIA16805.41127.51
Nasdaq4483.715+30.923
S&P 5001964.58+13.76
CDN Dollar0.8901-0.0003
Gold1231.20+2.10
Oil81.02-0.73
Lumber336.40+6.80
Natural Gas3.631+0.009

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07+0.015
Anavex Life Sciences0.194-0.004
Metalex Ventures0.045+0.005
Russel Metals33.39+0.23
Copper Mountain Mining2.03-0.05
Colorado Resources0.145+0.005
ReliaBrand Inc0.012-0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.445+0.035

 





FEATURED Property
2025508Lot 3 Scroggins Bay
10085792 bedrooms
$395,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


23741