While we highly recommend Gildan Custom T-Shirts, Fleece and Polo Shirts, we are growing increasingly concerned about the company’s overwhelming in the market dominance. The scope of Gildan’s market share is setting off alarm bells in these quarters due to the lack of credible competition from other major t-shirt manufactures. Gildan’s current market share is nearly double that of all competitors combined according to the latest A.C. Nielsen S.T.A.R.S. Data Report.

Why is this situation a major concern to custom t-shirt printers like us? We believe that the market place is in a vulnerable state for two reasons. First, if Gildan continues to control a 65% share of the market, our sources tell us that price increases will most likely occur within this calendar year, possibly as early as July or August. This reverses our opinion on stability in ARTICLE 12. We do not believe that this will be the result of increased commodity cost but rather Gildan’s implicit license to dictate the terms of the game. Secondly, we feel that supply is at risk if Gildan were to experience any significant disruption in manufacturing. Currently, there is no competitor in the wings that could fill a major void left by a reduction in Gildan production. Such a scenario could have a devastating impact on the custom t-shirt printing industry as well as promotional products suppliers. These two industry sectors currently contribute billions of dollars to an already weakened American economy. The U.S. based custom t-shirt manufacturing sector is also a major source of  jobs and revenue in the third world.

The most recent A.C. Nielsen S.T.A.R.S. Data Report shows that Gildan’s custom t-shirt market share has increased 11.5% year-to-date. During the same period, multiple competitors have experienced drastic declines in market share. The 2010 year-to-date Nielsen numbers show that Hanes share of the custom t-shirt market slid by -4.9%, followed by Anvil at -17.5%, Jerzees at -27.3%, and Fruit -27.00%. The bright spot is Standard American which posted a 43.1% increase in their overall share. In our opinion, this number is insignificant, due to the fact that Standard American only commands an overall share of 1.3% of the custom t-shirt market.

We will continue to report on this situation due to the fact that we have very serious concerns about the stability of the custom t-shirt market place from a supply and demand perspective. This situation should not be overlooked and alternative channels of supply should be explored at this time.

03/16/2010