Hanesbrands can't wait until it gets its Hanes on you. The company makes bras, boxers, hosiery, socks, and other unmentionables under top brand names, including 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 leaders, as well. Hanesbrands, which sells its products through stores such as Wal-Mart, Target, and Kohl's, also makes legwear under license for Donna Karan and underwear for Polo Ralph Lauren. Former parent Sara Lee spun off the division in late 2006. During the years since the spinoff, Hanesbrands has been shuttering plants and eliminating up to 5,300 jobs or some 10% of its workforce.
The company's seeing some movement among its executive ranks, as well. In 2011 CFO E. Lee Wyatt, who was at the helm when Hanesbrands began trading on its own, stepped down midyear, replaced by Dale Boyles, the apparel firm's controller and chief accounting officer, on an interim basis.
Hanesbrands generates some 88% of its 2010 revenue in the US; the rest came from its international customers. Wholesale sales to retailers make up most (81%) of its US business, while the balance of its revenue attributable to direct to consumer efforts (10%) and wholesale sales to third-party embellishers (9%). The company hopes to get about a $30 million revenue boost from its November 2010 purchase of Gear For Sports (aka GearCo Inc.). Kansas-based Gear for Sports makes licensed logo apparel for college bookstores.
To get more of its Hanes- and Champion-branded products into retail outlets, Hanesbrands in Q4 of 2009 extracted its retail operations, previously reported as part of the company's Innerwear segment, and created a separate Direct to Consumer reporting segment.
Beginning in 2010, Hanesbrands reorganized its business into six segments: Innerwear, Outerwear, Hosiery, Direct to Consumer, International, and Other. In general, they're organized by product category, geography, and distribution channel. Each sector shares the same Hanesbrands supply chain and media and marketing platform.
One of the company's key initiatives is to globalize its supply chain into economic clusters that require fewer larger facilities. To this end, Hanesbrands has shuttered about 10 manufacturing plants and three distribution centers. The closings include the company's last large knit-fabric textile plant in the US. As part of the company's streamlining efforts, its production facilities have been relocated to lower-cost locations in Asia, Central America, and the Caribbean Basin. Its distribution has been moved to the firm's West Coast distribution facility in California to accommodate expanded capacity from Asia. It also has purged about 6,800 positions in Mexico, the US, Costa Rica, Honduras, and El Salvador. In addition, some 200 management and administrative positions were eliminated, with the majority of the positions coming from the US. Meanwhile, its Asian workforce has doubled to about 7,000.
Other cost-cutting measures include Hanesbrands' exit from yarn production. In 2009 the company sold most of its yarn operations to North Carolina-based Parkdale Mills, which in turn agreed to supply yarn to Hanesbrands. As part of the deal, Parkdale took over plants in Georgia, Tennessee, and Virginia. Hanesbrands closed its remaining facilities in North Carolina.
With a more cost-effective supply base, Hanesbrands is looking to grow its revenues through renewed emphasis on retail partnerships. The company inked new agreements and expanded existing ones in 2010. It drew up contracts with mass merchandisers Wal-Mart and Target, as well as discount retailer Family Dollar. Hanesbrands also struck up deals with mid-tier stores that are adding its lower-priced labels, including J. C. Penney, Macy's, and Kohl's.
Some 46% of Hanesbrands' 2010 revenue was generated through sales of innerwear. Wal-Mart represented 26% of the company's 2010 sales, while Target helped to bring in 17%, and Kohl's another 6%. In other segments of its business, hosiery accounted for 4%. While Hanesbrands is best known to cater to consumers, the company sells its innerwear, outerwear, and hosiery products to the US military.