Gildan Responds to Lawsuit Filed by Russell Brands Affiliate of Fruit of the Loom

Tue Oct 16, 2012 9:33am EDT

* Reuters is not responsible for the content in this press release.

  MONTREAL, QUEBEC, Oct 16 (MARKET WIRE) --
Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL) is issuing a press release to
explain the events which have given rise to a lawsuit filed on October
12, 2012 by Russell Brands LLC, an affiliate of Fruit of the Loom,
alleging trademark infringement and unfair competition.

    In line with its strategy to further develop its presence as a supplier
of branded products to U.S. retailers, the Company has recently been
successful in obtaining several new programs. One such program obtained
by the Company is a program to supply all of the men's and boys' fleece
business for a retail customer, which was previously supplied by Russell
Brands under its Jerzees(R) label. This program is now being supplied
under the Gildan Smart Basics(R) label.

    As part of the terms of obtaining this program, Gildan was required to
purchase a small amount of Jerzees(R) inventory from the retailer.

    Gildan management subsequently became aware that a portion of the
Jerzees(R) inventory which it had purchased had been shipped to the
retail customer bearing Gildan(R) brand identification. Gildan took
immediate steps to correct the situation by seeking to retrieve all of
the Jerzees(R) product which had been shipped to the retailer from the
customer's retail outlets and distribution centres. Gildan is confident
that the amount of Jerzees(R) product under dispute is negligible, and
estimates that approximately $100,000 of disputed Jerzees(R) products
have been sold to consumers.

    The Company is currently conducting an internal review of the events and
internal controls relative to this matter. Although the dollar amounts
involved in the dispute are not material, the Company is treating this
matter seriously. Gildan is proud of the quality of its products and has
no wish to associate its products with those of another manufacturer or
another brand.

    About Gildan 

    Gildan is a marketer and globally low-cost vertically-integrated
manufacturer of quality branded basic family apparel. Gildan(R) is the
leading activewear brand in the printwear market in the U.S. and Canada,
and is increasing its penetration in international markets, such as
Europe, Mexico and the Asia-Pacific region. We are also one of the
largest suppliers of athletic, casual and dress socks sold to a broad
spectrum of retailers in the U.S. The Company markets its products under
a diversified portfolio of company-owned brands, including Gildan(R),
Anvil(R), Gold Toe(R), PowerSox(R), SilverToe(R), Auro(R), All Pro(R) and
GT(R). We are also the exclusive U.S. sock licensee for the Under
Armour(R) and New Balance(R) brands. The Company is now pursuing a
strategy to become a major supplier of basic branded activewear and
underwear for U.S. retailers. In addition to supplying retailers, Gildan
also manufactures select activewear programs for leading consumer brands.
With over 30,000 employees worldwide, Gildan owns and operates highly
efficient, large-scale, environmentally and socially responsible
manufacturing facilities in Central America and the Caribbean Basin and
has taken initial steps towards the potential development of a
manufacturing hub in Asia to support its planned growth in Asia and
Europe. More information on the Company can be found on Gildan's website
at www.gildan.com and more information on its corporate citizenship
practices can be found at www.genuinegildan.com.

    Forward-Looking Statements 

    Certain statements included in this press release constitute
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and Canadian securities
legislation and regulations, and are subject to important risks,
uncertainties and assumptions. This forward-looking information includes,
amongst others, information with respect to our objectives and the
strategies to achieve these objectives, as well as information with
respect to our beliefs, plans, expectations, anticipations, estimates and
intentions. Forward-looking statements generally can be identified by the
use of conditional or forward-looking terminology such as "may", "will",
"expect", "intend", "estimate", "project", "assume", "anticipate",
"plan", "foresee", "believe" or "continue" or the negatives of these
terms or variations of them or similar terminology. We refer you to the
Company's filings with the Canadian securities regulatory authorities and
the U.S. Securities and Exchange Commission, as well as the "Risks and
Uncertainties" section and the risks described under the "Critical
Accounting Estimates" and "Financial Risk Management" sections in our
most recent Management's Discussion and Analysis for a discussion of the
various factors that may affect the Company's future results. Material
factors and assumptions that were applied in drawing a conclusion or
making a forecast or projection are also set out throughout this
document.

    Forward-looking information is inherently uncertain and the results or
events predicted in such forward-looking information may differ
materially from actual results or events. Material factors, which could
cause actual results or events to differ materially from a conclusion,
forecast or projection in such forward-looking information, include, but
are not limited to:


--  our ability to implement our growth strategies and plans, including
    achieving market share gains, implementing cost reduction initiatives
    and completing and successfully integrating acquisitions; 
--  the intensity of competitive activity and our ability to compete
    effectively; 
--  adverse changes in general economic and financial conditions globally or
    in one or more of the markets we serve; 
--  our reliance on a small number of significant customers; 
--  the fact that our customers do not commit contractually to minimum
    quantity purchases; 
--  our ability to anticipate changes in consumer preferences and trends; 
--  our ability to manage production and inventory levels effectively in
    relation to changes in customer demand; 
--  fluctuations and volatility in the price of raw materials used to
    manufacture our products, such as cotton and polyester fibres; 
--  our dependence on key suppliers and our ability to maintain an
    uninterrupted supply of raw materials and finished goods; 
--  the impact of climate, political, social and economic risks in the
    countries in which we operate or from which we source production; 
--  disruption to manufacturing and distribution activities due to labour
    disruptions, political or social instability, bad weather, natural
    disasters, pandemics and other unforeseen adverse events; 
--  changes to international trade legislation that the Company is currently
    relying on in conducting its manufacturing operations or the application
    of safeguards thereunder; 
--  factors or circumstances that could increase our effective income tax
    rate, including the outcome of any tax audits or changes to applicable
    tax laws or treaties; 
--  compliance with applicable environmental, tax, trade, employment, health
    and safety, and other laws and regulations in the jurisdictions in which
    we operate; 
--  our significant reliance on computerized information systems for our
    business operations, including our JD Edwards Enterprise Resource
    Planning (ERP) system which is currently being upgraded to the latest
    system release, Enterprise One; 
--  changes in our relationship with our employees or changes to domestic
    and foreign employment laws and regulations; 
--  negative publicity as a result of violation of local labour laws or
    international labour standards, or unethical labour or other business
    practices by the Company or one of its third-party contractors; 
--  our dependence on key management and our ability to attract and/or
    retain key personnel; 
--  changes to and failure to comply with consumer product safety laws and
    regulations; 
--  adverse changes in third party licensing arrangements and licensed
    brands; 
--  our ability to protect our intellectual property rights; 
--  changes in accounting policies and estimates; and 
--  exposure to risks arising from financial instruments, including credit
    risk, liquidity risk, foreign currency risk and interest rate risk, as
    well as risks arising from commodity prices.


    These factors may cause the Company's actual performance and financial
results in future periods to differ materially from any estimates or
projections of future performance or results expressed or implied by such
forward-looking statements. Forward-looking statements do not take into
account the effect that transactions or non-recurring or other special
items announced or occurring after the statements are made, may have on
the Company's business. For example, they do not include the effect of
business dispositions, acquisitions, other business transactions, asset
write-downs, asset impairment losses or other charges announced or
occurring after forward-looking statements are made. The financial impact
of such transactions and non-recurring and other special items can be
complex and necessarily depends on the facts particular to each of them. 

    There can be no assurance that the expectations represented by our
forward-looking statements will prove to be correct. The purpose of the
forward-looking statements is to provide the reader with a description of
management's expectations regarding the Company's future financial
performance and may not be appropriate for other purposes. Furthermore,
unless otherwise stated, the forward-looking statements contained in this
press release are made as of the date of this press release, and we do
not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise unless required by applicable
legislation or regulation. The forward-looking statements contained in
this press release are expressly qualified by this cautionary statement.

Contacts:
Investor Relations
Laurence G.  Sellyn
Executive Vice-President
Chief Financial and Administrative Officer
(514) 343-8805
lsellyn@gildan.com

Sophie Argiriou
Director, Investor Communications
(514) 343-8815
sargiriou@gildan.com

Media Relations
Genevieve Gosselin
Director, Corporate
Communications
(514) 343-8814
ggosselin@gildan.com

Copyright 2012, Market Wire, All rights reserved.

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