Dive Brief:
- HanesBrands is evaluating options for its Champion business, including a potential sale or other transaction, or continuing to operate the brand, the company announced Tuesday.
- The company didn’t set a timetable for completion of the assessment and stated that there’s no assurance the process could result in a change. It added that it might “suspend or terminate the review at any time.”
- The assessment was announced on the heels of a recent license agreement Hanes made with G-III Apparel Group for Champion in North America.
Dive Insight:
Hanes announcement that it is now weighing additional strategies for Champion comes less than two weeks after announcing a multi-year license agreement with G-III Apparel, which Hanes leadership said was meant to grow its global network..
“We are executing a strategy that is based on leveraging our iconic brands and competitive advantages to drive accelerated growth and profitability, while simplifying and focusing all aspects of the business,” Steve Bratspies, Hanes CEO, said in the release announcing the strategic review.
Ronald Nelson, chairman of the board of directors, said in the release that the executive leadership has implemented “significant structural improvements” within the Champion brand that created more distinction between Hanes’ innerwear and activewear businesses.
The Champion brand reported decreased global sales of 16% in the second quarter, according to Hanes’ most recent earnings report in August. Sales declined 25% in the United States and 1% internationally for Champion. The company pointed to “challenging activewear market dynamics” in its earnings.
The deal with G-III was announced earlier this month, and financial terms weren’t disclosed. G-III’s executive vice president said the company’s vision for Champion was to build on the brand’s legacy by leaning into heritage pieces.
Hanes recorded $1.4 billion in net sales for its second quarter, a decrease from $1.5 billion the year prior. Ahead of the company’s earnings release, activist investment firm Barington Capital Group sent a letter to Nelson calling for Bratspies to step down.
For the assessment, Hanes has hired Goldman Sachs & Co. and Evercore as financial advisors and Jones Day and Kirkland & Ellis LLP as legal advisors.
