HanesBrands (PPAI 191138, Gold) – the No. 66 supplier in the 2024 PPAI 100 – which operates in the promotional products industry through the Hanes, Champion, ComfortWash and Alternative Apparel brands– has officially signed an agreement on the acquisition of its Champion brand by Authentic Brands Group. It was first reported in April that Authentic Brands had won a bid for the Champion.

  • According to HanesBrands, the deal involves a transaction value of $1.2 billion.
  • Ultimately, the deal has the potential to reach $1.5 billion contingent on meeting certain performance thresholds.
  • Authentic Brands Group is an intellectual property management company. Champion would be joining a host of other well-known brands under its umbrella, including Barney’s New York, Reebok, Brooks Brothers, Eddie Bauer and Nine West.

“Today’s announcement is the culmination of significant effort by our teams to position all of our brands on the optimal path for the future,” says HanesBrands CEO Steve Bratspies. “Over the past three years, we have taken necessary actions to enhance the Company’s operations and financial performance – returning to historical gross margins, reducing our cost structure, lowering our debt levels, and generating consistent cash flow.”

  • Champion’s global sales decreased 26% – down 35% in the United States and 17% internationally – in first quarter 2024, according to  HanesBrands’ Q1 2024 earning report. Sales had fallen by 23% in the final quarter of 2023.
  • HanesBrands has been seeking a sale of a Champion since the fourth quarter of 2023.
  • The apparel giant finished last year with a net debt of $3.1 billion, making the sale of Champion a much-needed financial boost.

“Following a thorough review of options for the global Champion business with the support of our financial and legal advisors, we are pleased to have reached this agreement with Authentic Brands Group that we believe maximizes value for Champion and best positions HanesBrands for long-term success,” says Bill Simon, chairman of the HanesBrands board.

“Importantly, we believe this transaction will enable the Company to accelerate its debt reduction while positioning HanesBrands to deliver consistent growth and cash flow generation through a focused strategy on advancing its leading innerwear brands and optimizing its world-class supply chain.”

 

What’s Ahead For Champion

For Authentic, the acquisition is part of a strategy to expand its portfolio of sports, lifestyle, entertainment and media brands and will increase its system-wide annual retail sales to more than $32 billion worldwide.

“Our successful efforts igniting Reebok’s momentum in sports have created a playbook to achieve a similar feat with Champion,” said Nick Woodhouse, president and chief brand officer of Authentic. “With expansive reach, differentiated channel strategy and a balanced strength across its women’s and men’s businesses, Champion has profoundly influenced sports culture.

“This is the perfect time for the brand to make a significant impact as women’s sports continue to broaden their presence and fandom worldwide.”

Authentic has said that it plans to leverage its platform of consumer verticals to convert the Champion business into a licensed model. It is reportedly in discussions with several existing and potential operators in key regions to manage the manufacturing, physical retail, e-commerce and wholesale operations of the business and maintain the brand’s global footprint.