Gildin's HanesBrands Integration in Focus as Major Holder Sells 137,548 Shares

Connecticut-based Ararat Capital Management cut its stake in Gildan Activewear (NYSE:GIL) by 137,548 shares in the third quarter, reducing its position by approximately $4.9 million, according to a November 14 SEC filing.

What Happened

According to the SEC filing dated November 14, Ararat Capital Management LP reduced its exposure to Gildan Activewear by selling 137,548 shares during the third quarter. The position’s value declined by $4.9 million, leaving the fund with 217,685 shares valued at $12.6 million as of September 30.

What Else to Know

Ararat Capital Management’s Gildan Activewear stake now represents 6.7% of its 13F reportable AUM, ranking as its fifth-largest position.

Top holdings after the filing:

• NYSE:BY: $18.8 million (10.1% of AUM)
• NASDAQ:LZ: $17.8 million (9.5% of AUM)
• NASDAQ:DRVN: $17.7 million (9.5% of AUM)
• NYSE:PLOW: $13.6 million (7.3% of AUM)
• NYSE:GIL: $12.6 million (6.7% of AUM)

As of Thursday, shares were priced at $58.52, up about 17% over the past year and slightly outperforming the S&P 500, which is up nearly 13% in the same period.

Company Overview

Company Snapshot

• Gildan produces and sells activewear, hosiery, underwear, and related apparel under brands including Gildan, American Apparel, GoldToe, and Comfort Colors.
• The company generates revenue primarily through wholesale distribution to screen printers, embellishers, retailers, and lifestyle brands.
• It serves wholesale distributors, screen printers, and major retailers across North America, Europe, Asia-Pacific, and Latin America.

Gildan Activewear Inc. is a leading global manufacturer of basic apparel, leveraging scale and vertical integration to deliver cost-efficient products across multiple geographies. The company focuses on supplying high-volume, high-quality activewear and hosiery to a diverse customer base, supporting both branded and private-label offerings. Its competitive advantage lies in operational efficiency, extensive distribution, and a strong portfolio of recognized brands.

Foolish Take

Ararat's move looks very much like it could be a recalibration rather than a loss of conviction, especially as Gildan enters a materially different phase of growth. With the HanesBrands acquisition now completed—doubling the company’s scale and introducing at least $200 million in run-rate cost synergies according to the December 1 announcement—Gildan is effectively transforming from a low-cost apparel manufacturer into a broader global powerhouse. That shift changes the risk–reward profile in ways that may reasonably prompt funds to rebalance even if the long-term story is strengthening.

Ararat Capital’s trimmed stake now represents 6.7% of assets, still a top-five holding. Meanwhile, Gildan's third-quarter revenue reached a record $911 million, though net earnings fell to $120.2 million from $131.5 million one year earlier, a sign that the core business remains cyclical even as Gildan integrates HanesBrands’ vast portfolio—including iconic names like Champion, Maidenform, and Playtex. Still, the combined platform gives Gildan a deeper moat, broader distribution, and improved vertical integration across the Western Hemisphere.

Glossary

13F reportable assets under management (AUM): The portion of a fund’s assets required to be disclosed in quarterly SEC Form 13F filings.
Assets under management (AUM): The total market value of all investments managed by a fund or investment firm.
Exposure: The amount of capital or percentage of a portfolio invested in a particular asset or sector.
Position: The amount of a specific security or asset held by an investor or fund.
Vertical integration: A company’s control over multiple stages of its supply chain, from production to distribution.
Wholesale distribution: Selling goods in large quantities to businesses (not directly to consumers), often for resale.
Screen printers: Businesses that print designs or graphics onto apparel and other products, often for custom or branded items.
Private-label offerings: Products manufactured by one company but sold under another company’s brand name.
Operational efficiency: The ability to deliver products or services using the least amount of resources while maximizing output.
Outperforming: Achieving a higher return or better results than a benchmark or comparable group.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.