Blog: Leonie BarrieNew heights for Hanesbrands

Leonie Barrie | 6 September 2006

Hanesbrands, which finally spun-off from Sara Lee today after a wait of 18 months, has straight away become one of the world’s biggest apparel companies with more than a century of history. Its iconic brand line-up includes Hanes, Champion, Playtex, Bali, Just My Size, Barely There and Wonderbra.

While there’s a lot of sense in separating these apparel assets from a parent company that’s probably more interested in its food, beverage, and household and body care businesses, the spin-off also brings a number of challenges. Continuing retail consolidation is narrowing down its customer base, and making it tougher to negotiate on price. It also competes in product categories besieged by cheap imports from China and other countries. And the new business starts out saddled with huge levels of debt, including a one-time payment of $2.4bn to Sara Lee to establish itself as a stand-alone company.

Nevertheless, the company's brands hold either the No 1 or No 2 sales market position in their key US product categories, and it sold more than 400 million T-shirts and almost half a billion pairs of socks in fiscal year 2005. And from this foundation there are probably untapped opportunities to grow its US brands abroad – especially in Asia.

Hanesbrands spin-off


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