HanesBrands has tapped financial advisors Goldman Sachs and Evercore, along with its board of directors and executive leadership team, to commence an evaluation of strategic options for the global Champion business.
The purpose of this evaluation is to explore various avenues to maximise shareholder value. These options may include a potential sale or other strategic transactions, as well as the continuation of the business as an integral part of Hanesbrands.
CEO of HanesBrands Steve Bratspies highlighted the company’s strategic approach of leveraging iconic brands and competitive advantages to drive accelerated growth and profitability while streamlining and focusing its operations.
He added: “As the board pursues this review of strategic options with the support of our advisors, our team remains focused on executing across our operations, continuing to serve our customers and consumers globally and advancing our initiatives to drive revenue growth, margin improvement and greater cash flow.”
This news follows a letter sent by an investment firm and shareholder of HanesBrands, Barington Capital Group L.P in August, who asked the US company to rethink its strategy and leadership team to “create sustainable value for its shareholders,” after Hanesbrands delivered a poor performance under its leadership and placed the company in a precarious position.
HanesBrands share prices at the time declined by -51.6% in the last year and this was attributed to the “management largely ineffective response to recent market challenges.”
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In response to the letter, the chairman of the board of directors, Ronald L. Nelson explained that the board and management team believed the initiatives that they had planned as part of the company’s Full Potential Plan would “unlock significant opportunities.”
In the same week the letter was sent, HanesBrands reported it was focusing on cost-saving initiatives to improve performance and enhance shareholder value after a 5% decrease in net sales in the second quarter of 2023, due to sluggish growth in its US Innerwear brand and Champion in Asia brand as well as a slowdown in consumer spending in Australia.
In regard to the Champion brand, HanesBrands added that a timeline for the completion of the process, a potential sale or not, has not been established.
“Champion is a renowned global lifestyle brand, with a storied heritage in sports as the pioneer of American athletic wear,” said Nelson.
“In recent years, the executive leadership team has implemented significant structural improvements within Champion that have resulted in greater distinction between the company’s innerwear and activewear businesses. We are committed to working with our advisors to identify the right path forward that enables both Champion and HanesBrands to reach their fullest potential and maximise value.”