MONTREAL—Gildan Activewear announces the purchase of Vermont-based Comfort Colors, a 30-year-old provider of dyed printwear products targeting the college and resort markets.
The deal, finalized Feb. 4, is for $100 million and is expected to close by the end of the current calendar quarter. In 2014 Comfort Colors generated net sales of approximately $95 million.
Comfort Colors, which markets its products under that brand name, buys prepared-for-dye garments from third-party vendors, including Gildan, and then treats them through a customized, in-house dyeing process.
Gildan President and CEO Glenn Chamandy says the fact that the companies share many of the same distributors is “one of the big synergies” of the deal.
“They take these shirts and put them into a dye machine and convert them into a color,” Chamandy says. “But it’s more of a weathered look like pigment dye… which is very, very strong today with the colleges, college bookstores, resort shops …"
Chamandy spoke with investors during a conference discussing the company’s earnings announcement, which was the same day the Comfort Colors deal was finalized.
In that announcement, Gildan reports net sales in the recent quarter of $390.6 million, down 13.5 percent compared to the $451.4 million in the year-ago quarter. The drop was primarily due to a decrease in printwear revenues, which were $160.3 million last quarter, down from $261.8 million a year ago.
The company told investors its drop in printwear revenue was due to actions it announced in December, specifically, lowering its base selling price for its printwear products significantly and reducing and simplifying its pricing structure for its distributors.
The same day as the earnings and Comfort Colors deal announcements were made, Gildan also announced the signing of Blake Shelton, five-time and reigning Country Music Association male vocalist of the year and coach on NBC’s “The Voice,” to an endorsement deal to promote the Gildan brand.