One of Gildan Activewear, Inc.’s sewing facilities, located in San Marcos, Nicaragua, has been destroyed by a fire. No Gildan employees were injured, and at this stage the company’s assessment is that the economic impact to Gildan is expected to be negligible.
Gildan is immediately implementing contingency plans to replace the production from this facility, which has annual production of approximately 3.5 million dozens, by increased production from external contractors and other Gildan sewing plants, including a second Gildan sewing facility located nearby in Nicaragua. Gildan’s objective is to restart operations in the San Marcos area, and the company expects to be operating at full production and full efficiency at this location in the first quarter of fiscal 2007.
Replacement of production equipment, inventory and any other assets, as well as transitional operating costs, are covered by Gildan’s insurance policies. The company is taking steps to alleviate any impact on its San Marcos employees during the transitional period.