Hanesbrands has revealed plans to cut the production of basic apparel used in screen printing, exit its private label business, the Outer Banks sportswear brand and sell its European operations in order to improve margins. 

The clothing manufacturer will sell its European imagewear division to an affiliate of Smartwear for EUR15m (US$18.6m).

"We are a branded company. That includes being committed to branded printwear in the United States where we can partner with our wholesale customers to take advantage of our strong consumer brands and product differentiation," said Hanes chairman and CEO Richard Noll.

"With our exit from Europe, we can devote all of our energies to growing our branded portfolio in core geographies in the Americas and Asia."

The imagewear division accounts for some 8% of company revenue. It said that it expects to incur pre-tax charges of $85-95m, in the write off of intangibles, the loss on the sale of the European business, inventory markdowns, and other related items to the imagewear actions. 

While it expects the move will reduce net sales by approximately $60m in the second half of the year, it will have an "insignificant impact on operating profit".

The company will rename its imagewear operations as branded printwear, which will be focused on Hanes and Champion branded products in the US.