Hanesbrands Modernizing IT and Supply Chain Tech Stack As Part of Strategic Review

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Hanesbrands Modernizing IT and Supply Chain Tech Stack As Part of Strategic Review

By Lisa Johnston - 11/10/2020
Hanesbrands has received FDA approval for its face mask to be used by healthcare professionals.

Hanesbrands will look to modernize its technology infrastructure and supply chain technology as it implements a strategic review as part of a multi-year transformation journey.

The No. 77 consumer goods company reported third-quarter sales of $1.81 billion, down 3% from the prior-year period. Gross profits dropped 14% year over year.

Hanesbrands’ quick entry into personal protective equipment (PPE) helped bolster the company against declining apparel revenue. Excluding $179 million of PPE sales, apparel revenue declined 7% year over year — though a big improvement vs. the Q2 40% decline — and the company has received U.S. Food and Drug Administration approval for one of its face masks to be used as PPE by health care professionals.

The company expects total sales of $1.6 billion to $1.66 billion in the fourth quarter, indicating a 2% decline vs. the prior year.

Hanesbrands is evaluating its entire global portfolio, including category trends, cost structures and inventory mix, CEO Steve Bratspies, who joined the company earlier this year from Walmart, detailed in an investors calls. As part of this, it’s re-examining its supply chain, tech infrastructure and concept-to-consumer processes, including online and direct-to-consumer capabilities and how it’s perceived by retailers. 

“We will have a consumer-centric mindset,” said Bratspies. “The consumer is going to be at the center of everything that we do. We will become faster and more flexible by simplifying organizational structure, as well as streamlining processes and decision making, particularly around concept to consumer. We will commit to growth.”

Hanesbrands is looking for opportunities to modernize its technology, as well as segment its supply chain to accelerate speed to market.

“We must expand our digital focus and capabilities to be able to capture our share of online growth, and we’ll invest in talent, filling current gaps, while also developing the next-generation of leaders,” Bratspies said.

The company intends move purposefully in its digital, go-to-market and channel strategies for every brand, expecting each one to play out differently. Modernizing its technology will in turn unlock opportunities for Hanesbrands to improve speed and efficiency, potentially through better channel and supply chain cohesion.

“I think we have to look at our supply chain going forward and really [understand] … how do we align it to make sure it supports all of our key businesses as we go forward?” he said. “It was built on one model, and incredibly successful in doing that, and it’s proven its ability to flex to some extent. But I think we’re challenging its flexibility right now as we build out our D2C business in different parts around the world.”

Bratspies noted that the company is going to be similarly mindful of its cost transformation, through both short- and long-term cost initiatives.  

“We’re obviously going to be as aggressive on the cost side as we are on the investment side, and fund as much of it as we can out of how we operate today.”

“Customers out there, they are looking for our brands, online,” he later added. “We need to continue to build a great online presence both in our third-party partners and in our own online business as well.”

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