Hanesbrands can't wait 'til it gets its Hanes on you. The company designs, makes, and sells bras, hosiery, men's boxers, socks, and other intimate apparel under brand names such as Bali, Champion, barely there, Just My Size, Hanes, L'eggs, Playtex, and Wonderbra. Its bras are tops in the US; its underwear, legwear, and activewear units are market leaders, as well. Hanesbrands also makes basic outerwear, such as T-shirts, and licensed logo apparel for collegiate bookstores, legwear for Donna Karan, and underwear for Polo Ralph Lauren. The lineup is sold to wholesalers, major retail chains (Wal-Mart, Target, and Kohl's), and through Hanesbrands' value outlets and Internet site. It's buying Maidenform in 2013.
Mergers and Acquisitions
Looking to boost earnings, Hanesbrands agreed in 2013 to acquire Maidenform for $547 million. The move gives Hanesbrands a brands portfolio with greater depth (adding the Maidenform, Flexees, and Self Expressions brands) to better compete with rivals, such as Victoria's Secret and Spanx, who are changing the landscape of the bra and underwear niche of the apparel industry with frilly and shapewear options. Once the deal is final, Hanesbrands expects the Maidenform purchase to add to its earnings within 12 months. It will see the full benefits of the acquisition within three years.
Hanesbrands rings up 89% of its sales in the US. International markets, including Australia, Brazil, China, Japan, and Mexico, account for 11%.
Sales and Marketing
Wal-Mart, Target, and Kohl's are the company's largest customers, accounting for 28%, 18%, and 6% of 2012 sales, respectively. Mass merchandise stores are vital to the company's performance, accounting for about half of Hanesbrands' total sales. Hanesbrands also allies with mid-tier stores, including J. C. Penney, Macy's, and Kohl's, which are adding its lower-priced labels. It's L'eggs and Hanes brand underwear are also sold in food, drug, and variety stores. Hanesbrands also sell apparel to the US military for sale to soldiers and through discount chains, including Dollar General and Family Dollar Stores.
The apparel maker's sales fell more than 2% in 2012 to $4.5 billion versus more than $4.6 billion in 2011. Net income declined 38% over the same period.
Looking abroad in 2014, Hanesbrands agreed to acquire DBApparel Group of France, a maker of intimate apparel in Europe, from investment firm Sun Capital Partners. DBApparel holds the license to manufacture and sell apparel under the Wonderbra and Playtex trademarks in the European Union, as well as several other nations in Europe and South Africa.
In 2012 Hanesbrands narrowed the focus of its imagewear business, which sells licensed logo apparel, by selling its European and private-label imagewear businesses. Going forward the apparel maker will focus its imagewear business (now known as branded printwear) on Hanes and Champion branded products in the US. Hanes entered the imagewear business in late-2010 with the purchase of GearCo (aka Gear for Sports), a leading seller of licensed logo apparel in collegiate bookstores and other sales retail channels, to further its strategy of creating stronger branded and defensible businesses in its Outerwear segment.
Going forward, Hanesbrands is focusing on reducing production costs. It counts on improving operating efficiencies primarily by using a low-cost global supply chain based upon a combination of owned, contracted, and sourced manufacturing. It has successfully started and increased production at a textile plant in China, its first company-owned facility in Asia. Hanesbrands meanwhile shuttered about 10 manufacturing plants and three distribution centers. The closings include the company's last large knit-fabric textile plant in the US.
Investment firm FMR LLC owns about 10% of Hanesbrands' shares.
Hanesbrands was formed in 2005 and spun off from Sara Lee Corp. (known know as Hillshire Brands Company) in 2006.