Hanesbrands enters Champion licensing deal with global fashion group

Champion’s activewear line is one of HanesBrands’ two primary apparel brands, along with its Hanes basic apparel line.

The agreement, announced Thursday, covers “the design, production and distribution of outerwear” for the two brands in North America, “including exploring opportunities across Champion’s global network as a key partner.”

Vanessa LeFebvre, HanesBrands’ president of its Global Activewear unit, said in a statement that G-III brings to the Champion brands a “team of world-class experts in expanding and elevating iconic brands, making them a powerful partner as we grow Champion globally.”

HanesBrands opened the curtain in May 2021 on its Full Potential initiative, which is focused on its core strengths: its globally recognized basic apparel brands, foremost Champion and Hanes; domestic, Central and Latin American and Asian supply chain; “deep consumer loyalty”; broad channel distribution; and global footprint.

The companies could not be immediately reached for additional details on how the production and distribution elements of the agreement would work.

HanesBrands disclosed Aug. 2 it would end its domestic manufacturing presence by closing a hosiery production plant in Clarksville, Ark., with 200 employees by Sept. 30.

G-III defines its business model as designing, sourcing and marketing apparel and accessories for more than 30 owned, licensed and private-label brands.

Bowman Gray IV, a local independent stockbroker, said the agreement could mean the manufacturing of Champion being outsourced to G-III.

“It may be an attempt to reduce costs, but it could be a first step to selling Champion,” Gray said. “It is probably the previous, given HanesBrands’ need to conserve cash.

“It may work. After all, G-III manufactures overseas. This move saved Levi’s many years ago, moving its manufacturing to Mexico and Vietnam.”

The Champion brands would join G-III’s fashion licensed portfolio which includes Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi’s and Dockers.

G-III owns brands that include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc and Marc New York.

G-III also features a team sports apparel business with licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and more than 150 U.S. colleges and universities.

“G-III’s proven track record in category expansion and their best-in-class global infrastructure will enable us to reach a wider consumer base who already are, or will soon become, loyal to the Champion brand for generations,” LeFebvre said.

Jeffrey Goldfarb, a G-III executive vice president, said in a statement that “we are excited to welcome Champion, an iconic American brand that is rooted in sports and an active lifestyle. It will fit seamlessly into our already well-developed outerwear divisions and global network.”

“Our vision is to build on the brand’s legacy and create quality heritage pieces which complement and enhance Champion’s principles of self-expression.”

HanesBrands chief executive Stephen Bratspies said in the manufacturer’s Aug. 10 second-quarter earnings report that it continues to be challenged by “the difficult apparel market, particularly in Australia and the U.S. activewear category.”

Second-quarter activewear sales declined 19% to $267.5 million. Champion sales were down 25% in the U.S., but international sales limited the overall sales decline to just 1%.

“The (Champion) brand is not where we expected it to be at this point in the U.S.,” Bratspies said.

“Sales are going to remain pressured through the back half of this year. We’re seeing soft point-of-sale right now in a challenging category as we go forward.

“I feel like we’re moving in the right direction, but it is taking us longer than we initially anticipated.”

HanesBrands’ share price has slumped in response. The 52-week share price range is $3.85 to $9.48, with the share price opening Thursday at $4.89.

On Aug. 10, HanesBrands confirmed it  eliminated at least 250 U.S. corporate jobs, sending the work to international operations as part of the ongoing Full Potential initiative.

“We’re taking a number of actions, including additional cost saving initiatives, to improve performance, as well as actively looking across the business at additional options to enhance shareholder value,” Bratspies said.

In January, HanesBrands confirmed it had cut an unspecified number of local jobs in response to current financial and sales challenges. Reuters reported that 310 employees were affected by the January job cuts. HanesBrands has not confirmed or denied that reduction total to the Winston-Salem Journal.

The last workforce count HanesBrands has provided listed about 2,300 employees in Forsyth County and about 2,800 in North Carolina, counting a distribution center in High Point.

Based on those totals, the 250 corporate jobs would represent about 11% of the Forsyth workforce.

If the 310 job cuts in January are separate from the 250 corporate job reductions, the local workforce count could be down as much as 24%.

In August, HanesBrands confirmed receiving demands for major operational changes from shareholder and activist investor Barington Capital Group.

HanesBrands disclosed the Barington initiative following recent media reports, including by the Wall Street Journal, that the shareholder group was pushing the manufacturer’s management to take step to reverse a major share-price decline this year.

As typical with an activist investor, Barington pulled no punches in its description of HanesBrands’ current operational status, citing its view that Bratspies and the board have been ineffective.

It called for hiring a new chief executive and a major board membership shakeup.

HanesBrands announced July 12 the promotion of Scott Lewis to chief financial officer, effective immediately, while he retains his chief accounting officer role.