Gildan, Russell reach $1 million settlement

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Associated Press

Posted on March 1, 2013 at 3:01 PM

Updated Friday, Mar 1 at 3:01 PM

LOUISVILLE, Ky. (AP) — A Canadian apparel company has reached a $1 million settlement with Russell Brands and Fruit of the Loom in the relabeling and resale of Jerzees brand sportswear at stores in at least three states.

The agreement ends a dispute between Gildan Activewear Inc., based in Montreal, and the two Bowling Green, Ky.-based companies. Under the terms of the agreement, Gildan must stop removing or altering Jerzees labels and tags and must destroy any stock of the sportswear. Gildan Activewear will also pay $50,000 in attorney's fees for the two companies.

Gildan spokesman Peter Iliopoulos says the company offered the settlement to end the litigation and did not admit any wrongdoing.

"From our perspective ... we essentially offered a million-dollar settlement to end it," Iliopoulos said. "We wanted to put the matter behind us."

Kentucky-based Fruit of the Loom and Russell Brands sued Gildan in federal court last year, accusing Gildan of selling Jerzees brand clothes under its own name and trademark after winning a contract with Dollar General stores.

In court records, Gildan denied violating any trademark laws.

The dispute arose in late 2011 when Dollar General stores stopped buying Jerzees branded clothing from Russell Brands and Fruit of the Loom. The discount chain switched to Gildan Activewear as its supplier.

Russell Brands and Fruit of the Loom alleged that Gildan Activewear began altering the Jerzees merchandise by tearing off labels and putting its own trademark on the clothing. Russell Brands and Fruit of the Loom said the relabeled items were sold in stores in Kentucky, Alabama, Florida and in stores in the Midwest and Northeast.

"A portion of the Jerzees inventory we purchased had been shipped back to the retailer with the Gildan label," Iliopoulos said.

Iliopoulos said Gildan immediately moved to correct the problem and make changes to keep similar issues from arising again.

Russell Brands and Fruit of the Loom said allowing Gildan to sell the Jerzees apparel could mislead customers about which company makes the brand.

Attempts to reach a spokesman for Russell Brands and Fruit of the Loom, both arms of Berkshire Hathaway in Omaha, Neb., were unsuccessful.

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Follow Associated Press reporter Brett Barrouquere on Twitter: http://twitter.com/BBarrouquereAP

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