Gildan Activewear Inc. said Monday it is temporarily halting production at all manufacturing plants until at least mid-April in response to the spread of COVID-19.
Gildan, based in Montreal, has major manufacturing and other operations in Mocksville, Eden and Salisbury with more than 1,000 employees combined.
The manufacturer could not be immediately reached for comment on whether it had plans to pay affected employees during the shutdown.
The manufacturer's decision was prompted in part by decisions made by the governments in Latin America countries, where it has production plants, to shut down private enterprise activities.
The halt also is a reflection of decreasing demand for its products as retailers have closed temporarily or only sell products online.
"Given the impact of all these factors, the company announced today that it is temporarily suspending production," the company said in a statement. "This will allow us to respect government recommendations and align production and inventory levels with current demand requirements.
"All other areas of our business, including our distribution centers, which service the various regions where we sell our products, will remain open for the time being with good inventory availability levels to service our customers.
"We expect the multitude of recently announced temporary store closures and social distancing measures being recommended by governments and health protection agencies will also continue to slow retail demand."
Gildan said in its Feb. 20 fourth-quarter 2019 financial report that it “does not project and has not incorporated in its guidance any meaningful impact on its business resulting from the current outbreak of the coronavirus in China."
At that time, it predicted fiscal 2020 earnings per share in a range of $1.70 to $1.95.
On Monday, Gildan withdrew that prediction and said it "expects to provide a further update when it releases its first quarter 2020 earnings results."
"Given the unprecedented nature of the COVID-19 situation, which is changing rapidly, the company will continue to monitor and adjust its plans for its business as the situation evolves."
On March 17, the company acquired the remaining available portion of its revolving long-term bank credit to give it — as of now — nearly $600 million of liquidity.
"We have a high degree of financial flexibility as we move forward to deal with COVID-19 challenges given our fixed cost structure and focus on expense, capital expenditures and working capital management, as well as our balance sheet and access to liquidity," the company said.
"We have been able to successfully navigate through difficult times over the years and adapt to changing environments, which gives us confidence that our strong business model, financial position and resilience will continue to position us well for long-term success as we emerge from the COVID-19 crisis."