HanesBrands’ decision to shed its flagging Champion business, alluded to for months, will come to fruition in the second half of its financial year. Authentic Brand Group has signed a binding agreement to purchase the Champion athletic wear business for up to $1.5 billion. The transaction, expected to close sometime in H2, further broadens Authentic’s vast brand and company portfolio, which also includes Reebok, Sperry, Rockport, Eddie Bauer and Hunter, to name a few. The deal’s financial terms include a $1.2 billion purchase price and up to $300,000 more in an earn-out if the Champion business meets certain financial objectives.
For HanesBrands, the sell-off will give the group needed proceeds to lower its debt level, optimize its supply chain and make additional investments in its remaining brands, which include Hanes, Bonds, Maidenform and Bali.
During its year-end conference call in mid-February, HanesBrands confirmed that Champion’s annual global sales are in the $1.7 to $1.8 billion range. Champion sales fell 23 percent in Q4 and were projected to contract further in H1/24 as excess inventory was moved ahead of the Fall/Winter 2024 product launches.
In Q1, which ended March 30, global Champion sales fell by 25 percent year-over-year despite some emerging brand momentum in Asia. U.S. sales eroded by 35 percent in the period due to ongoing inventory clean-up and a strategic repositioning of the business into cleaner sales channels. In mid-May, HanesBrands’ senior executives described Champion’s European wholesale business as ‘challenging’ and unlikely to improve anytime soon.
