Gildan (asi/56842), the fifth-largest supplier in the promo products industry and one of the largest producers of apparel basics in the world, is shuttering its manufacturing operations through mid-April in response to fallout from the novel coronavirus pandemic.  

The Montreal-headquartered corporation announced the temporary shutdown on Monday. Declining demand in Gildan’s imprintables market business (which includes promo), anticipated slower demand at retail, and government-mandated closures in areas where the company manufactures compelled the decision to suspend production activity.

The shutdown “will allow us to respect government recommendations and align production and inventory levels with current demand requirements,” Gildan said in a statement.

The company noted that its distribution centers will remain open “for the time being.” Inventory levels are strong, Gildan said. Executives asserted that appropriate measures are in place to protect employees from COVID-19, including remote work arrangements for office staff.

Gildan noted that the government of Honduras, where the company has extensive manufacturing operations, mandated that all private businesses close until March 29. “Governments of some of the other countries in which we operate are also issuing similar directives to combat the spread of COVID-19,” Gildan said in a statement.

Worried about the economic impacts of coronavirus, Gildan drew down the remaining available portion of its long-term bank credit facility on March 17 – a move that gives the company about $600 million in liquidity. Gildan, a publicly traded company, also plans to revise its financial projections for 2020 to account for anticipated weakened performance. 

With estimated 2019 North American promotional products revenue of $650 million, Gildan ranked fifth on Counselor’s latest list of the largest suppliers in the industry. Even before the coronavirus outbreak, Gildan had experienced some tough times of late. In 2019, the company’s total worldwide sales across all business channels were down 2.9% year over year to about $2.82 billion. Net earnings tallied $259.8 million; that was about $91 million less than in 2018.