Montreal, June 27, 2002 – Gildan Activewear Inc. (NYSE: GIL; TSX: GIL.A) today announced that it had further strengthened its position as a vertically-integrated manufacturer with the acquisition of essentially all of the fixed assets of the yarn-spinning facility formerly operated by Canadian Fidelity Mills Ltd. The assets were purchased from Fidelity’s secured creditors following its recent bankruptcy filing for approximately $6.5 million, a substantial discount from book value. Gildan will initially lease the property where Fidelity operated its yarn manufacturing business, and has an option to acquire this property, which is located in Montreal close to Gildan’s knitting facility, for $6.25 million.

This acquisition, combined with the previous acquisition of the Cavalier Specialty Yarn operation in June 2001, will ensure that, for a relatively low capital cost, close to 100% of Gildan’s cotton and polyester yarn requirements for its Canadian textile operations can be fulfilled from verticallyintegrated Company-owned operations. The Company’s existing long-term yarn supply contract with Frontier Spinning Mills Inc. will be utilized to meet the requirements of Gildan’s major new greenfield textile manufacturing facility currently being started up in Rio Nance, Honduras. The acquisition of the Fidelity assets is expected to yield initial annual after-tax cost savings of at least $5.0 million after interest and depreciation, or in excess of $0.15 per share on a diluted basis, starting in fiscal 2003.

The assets acquired include specialized air-jet technology for the manufacture of polyester yarn, in addition to cotton yarn, so that this acquisition will enhance Gildan’s recent introduction of its 50% cotton/50% polyester fleece product-line.

H. Greg Chamandy, Chairman and Chief Executive Officer of Gildan Activewear, commented that “the acquisition of these yarn-spinning assets further reinforces our focus on being a verticallyintegrated manufacturing company, in order to continuously drive down our cost structure and further reinforce our position as low-cost producer in our industry.” Mr. Chamandy added that “approximately 120 jobs will be created as a result of this investment.”

Including the impact of the additional cash outlay for the acquisition of the Canadian Fidelity assets, Gildan anticipates that free cash flow after capital expenditures for the current fiscal quarter will exceed the Company’s most recent estimate, primarily due to further reductions in working capital.

Profile

Gildan Activewear is a vertically-integrated manufacturer and marketer of premium quality branded basic activewear for sale principally in the wholesale imprinted activewear segment of the Canadian, U.S., European and other international apparel markets. The Company manufactures and sells premium quality T-shirts, placket collar golf shirts and sweatshirts in a variety of weights, sizes, colours and styles. The company sells its products as blanks, which are ultimately decorated with designs and logos for sale to consumers.

(Unless otherwise indicated, all amounts are expressed in Canadian dollars.) Certain statements included in this press release may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking