HanesBrands Selling off Champion Brand to Authentic for $1.2 Billion
HanesBrands is offloading its global Champion brand, which is being acquired by Authentic Brands Group in a $1.2 billion deal (or up to $1.5 billion if Champion meets performance thresholds).
HanesBrands CEO Steve Bratspies said the transaction is part of a three-year strategy to optimize operations and financial performance.
Global Champion sales decreased 25% in Q1. In the recent call with investors, Bratspies said the company was focused on building brand heat and marketplace segmentation for Champion to position it for long-term profitable growth.
The transaction is expected to finalize in the second half of 2024. Authentic Brands will be adding the brand to an existing portfolio that includes a variety of clothing brands, including Aeropostale, Eddie Bauer, Forever 21, and Ted Baker.
HanesBrands' Long-Term Strategy
The deal will net the company about $900 million from proceeds, which it will use to pay down debt. As part of its long-term strategy, HanesBrands plans to continue focusing its efforts on growing its innerwear category, which includes such brands as Hanes, Bonds, Maidenform, and Bali, as well as optimizing its supply chain.
During the earnings call, the company stated that it has already taken several steps to enhance its operating and financial models, including introducing new capabilities around brand building, data analytics, and inventory management and SKU discipline to streamline the supply chain.
This past October, for example, the company implemented an AI-powered tool in order to answer “complex supply chain questions” and making the information accessible to all HanesBrands associates in order to optimize its supply chain.
“As we begin the next chapter for HanesBrands, we believe we’re in an even stronger position to further extend our leadership in innerwear, pursue new cost reduction opportunities as we ensure we have the right operating structure in place, and advance our multi-year flywheel to drive strong shareholder returns,” said Bratspies.
