Gildan Might Make Its Face Mask Production Permanent

After adding production of face masks and gowns for health care workers during the COVID-19 pandemic, Gildan Activewear said that it’s considering making this facet of its business permanent, even after the stay-at-home orders relax and things regain relative normalcy.

Gildan, which has been producing non-medical face masks and isolation gowns at its Honduras factories, has had steady demand throughout April, and has reportedly considered keeping that aspect of its business open into the future.

“All of a sudden it’s turned out to be much bigger than we anticipated,” Gildan CEO Glenn Chamandy told Bloomberg. “This could become part of our business as we go forward.”

Meet William, who decided to come back to work during these uncertain times and assist in the global fight against COVID-19. While he typically manufactures the textiles that make our apparel, he recently began helping us produce textiles for #PPE @Fash_Rev pic.twitter.com/EudqVVTiXG

— Gildan (@gildancorp) April 25, 2020

Gildan reported that first-quarter sales dropped 26 percent, and predicted a “significant earnings loss” for the second quarter of this year. Bloomberg also reported that Gildan’s Canadian-listed shares dropped 49 percent in 2020. With demand for PPE projected to remain high, the company's plan is to continue making 150 million masks and gowns in its production facilities in Honduras and Nicaragua using a U.S. yarn spinning factory that it will partially reopen specifically for this project.

Right now, Gildan’s primary customer base for these products have been local governments and retail brands supplying health care organizations, particularly in the U.S., which just passed the 1 million confirmed case benchmark.

Within the context of the pandemic, which has spurred more domestic manufacturing amongst fears and complications in overseas sourcing, Gildan is uniquely positioned. While it is still producing the face masks and gowns outside of North America, its production facilities in Honduras and Nicaragua create shorter turnaround times than companies sourcing from Asia.

“Even though we’re in Central America, we’re an hour and a half away from Miami,” Chamandy told Bloomberg. “It’s not like being in Asia, which is a completely different hemisphere. I think that’s an important part of our process.”

The production process, from the yarn spun in the U.S., sent to Central America and then back to the U.S., takes under five weeks, according to Chamandy.

Gildan says it hasn’t yet made much profit from PPE, since it has given some of the products away during the pandemic. But, once things subside and Gildan compares the production costs against demand, that would likely change.

“If we decided to make this a venture as we go forward, obviously it would have to have a good economic return,” Chamandy said.