Consistent with the company's strategy to consolidate its sock production at its new facility in Honduras, Gildan Activewear Inc. has closed two sock facilities located in Mount Airy, N.C. Approximately 520 employees will be affected by the closures, which will be completed by the end of August 2007. The company will continue to knit socks at its one remaining facility in Hillsville, Virginia. In addition, the company is consolidating certain retail sales and administrative functions, based at the Kentucky Derby Hosiery head office in Hopkinsville, Kentucky, into other Gildan operations.
The restructuring costs for the above manufacturing and administrative integration were fully provided at the time of the Kentucky Derby Hosiery acquisition in July 2006. The cost reduction benefit of both the manufacturing and administrative consolidations has already been taken into account in the company's previously announced EPS accretion targets for its acquisition of Kentucky Derby Hosiery. After reflecting the recent 2-for-1 stock split, the company continues to anticipate a run-rate of 10 cents per share accretion impact by the end of its current fiscal year, increasing to 15 cents per share by mid-2008, when Gildan's new sock manufacturing facility is expected to be fully ramped up.