Hanesbrands Inc. indicated toward the end of last year that it would sell its Champion brand. At the time, there were a few interested parties, like WHP Global and Authentic Brands Group. Now just a little over three months later, word on the street is that Hanes is ready to start the bidding at about $1.4 billion
According to WWD, Hanes hired Goldman Sachs and Evercore to look into the possibilities of offloading the Championship brand, now leading to a deadline on first-round bids this week.
That $1.4 billion figure is close to what WWD reported as Hanesbrands’ entire market capitalization—$1.6 billion. Hanes ended last year with a net debt of $3.1 billion, so that sort of cash injection would go a long way for the storied apparel brand. WWD also reported that Hanes ended last year with $1.3 billion in liquid assets, but wants to continue to pay down its debts, having paid down $500 million last year and planning to pay another $300 million in 2024.
And despite anecdotal evidence of ’80s and ’90s sportswear fashion, namely Champion branded products, coming back, Champion’s global sales still fell 23% in the fourth quarter of 2023, which gives Hanes an incentive to rehome the brand and focus on its own growth amidst what it called a “challenging activewear apparel market dynamics.”
“We continue to aggressively implement our Champion performance enhancement plan to strengthen the brand and position Champion for long-term profitable growth,” Hanesbrands CEO Steve Bratspies said on a conference call this month, according to WWD. “We went into the execution of our Champion strategy with a full understanding that these long-term strategic actions would create real top-line headwinds in the short term, which we’re seeing play out.”
He added that the company is “confident” that it’s “taking the right steps to drive the long-term success of Champion.”
Sources close to the matter did not reveal to WWD who the potential bidders were, but there’s a good chance it’s the same companies that showed interest back in November.
