HanesBrands Inc. announced plans on Wednesday to sell its renowned global Champion brand to Authentic Brands Group for a price ranging between $1.2 billion and $1.5 billion.
Rumors of this pairing had been circulating among industry analysts and media sources since November 1, shortly after HanesBrands’ board of directors and executive management disclosed the possibility of selling Champion as part of their strategy to enhance shareholder value.
Champion’s apparel sales span over 90 countries, with more than 40% of its $2 billion fiscal 2023 sales coming from international markets outside of North America.
Media reports, including Women’s Wear Daily (WWD.com), indicated in early April that Authentic Brands Group was the chosen buyer for Champion, with negotiations ongoing regarding the sale price between HanesBrands’ asking price of $1.4 billion and Authentic’s offer of $1 billion.
People are also reading…
The anticipated sale, expected to be finalized in the second half of 2024, poses a significant financial impact as Champion represents a substantial portion of HanesBrands’ $5.6 billion fiscal 2023 sales, in addition to being a key activewear brand for the company.
HanesBrands mentioned that the potential sale could reach up to $1.5 billion, contingent on meeting certain performance targets, with an estimated $900 million in net proceeds anticipated for debt reduction.
Bill Simon, the CEO of HanesBrands, stated that the sale of Champion will optimize value for the brand and strategically position the company for long-term success by focusing on its core innerwear brands and improving its supply chain.
Authentic Brands Group expressed excitement about the acquisition, expecting it to elevate their system-wide annual retail sales to over $32 billion globally. Jamie Salter, Authentic’s chairman and CEO, emphasized Champion’s compatibility with their existing portfolio of sports and entertainment brands.
Authentic Brands Group plans to transition Champion’s operations to a licensed model, collaborating with various partners to oversee manufacturing, retail, e-commerce, and wholesale aspects of the business while maintaining the brand’s global presence.
The sale of Champion signifies a strategic shift for HanesBrands towards enhancing its basic apparel brands such as Hanes, Bonds, Maidenform, and Bali, aiming to bolster market share and attract a younger consumer base.
Despite the sale of Champion, HanesBrands remains committed to pursuing cost reduction initiatives to ensure operational efficiency, deleverage its balance sheet, and drive shareholder returns.
Bratspies and the board have faced criticism from investor groups due to Champion’s declining sales and the company’s lagging stock performance, prompting calls for strategic changes and debt reduction measures.
The sale of Champion is a significant move that could strengthen HanesBrands’ financial position, although it raises questions about the company’s future growth prospects and brand differentiation strategy.
rcraver@wsjournal.com
336-727-7376
@rcraverWSJ
