Low-cost Canadian clothing manufacturer Gildan is ending all US production as production from its remaining four sock knitting plants in Alabama is shifted to a new facility in Honduras, Central America.

The Montreal-based company closed its last Canadian production unit in 2007 and informed 280 workers in Fort Payne, Alabama this week that it will close its four sock production units there by April. Gildan purchased the facilities from V.I. Prewett & Son, a Walmart supplier, for a reported US$135 million in 2007.

At the time of purchase, Gildan said it would retain some of Prewett's production by reducing outsourcing to knitting contractors. However, successive layoffs in each of the subsequent three years made more than a thousand workers redundant in the area that once labelled itself the ‘sock capital of the world’.

“The production capacity will be relocated to our new vertically integrated facility in Central America in order to respond to global competition pressure and further improve supply chain efficiencies and costs,” company spokesperson Genevieve Gosselin said in a statement. “Gildan has been accelerating cost reduction initiatives in light of rising costs of raw materials.”

 “I think everybody here knew at some point they would totally close their operations,” Jimmy Durham, executive director of the DeKalb County Economic Development Authority. Told local journalists. Durham said when Gildan, headquartered in Quebec, purchased the V.I. Prewett and Son organization, he anticipated it would be pulling out and moving operations to Honduras.

Gildan announced in December 2008 it would phase out its U.S. sock finishing operations in Fort Payne, then eliminating 220 jobs, citing a severe economic downturn and increased global competition in socks.