HanesBrands Is Set to Sell Champion to Authentic Brands Group in a $1.2 Billion Deal
HanesBrands Inc. has sealed the deal to sell the Champion brand to Authentic Brands Group. The deal includes the Champion brand and some of its operating assets, at a sum of $1.2 billion. Authentic could potentially pay an additional $300 million, based on the brand’s performance.
Authentic initially agreed to the purchase on April 2, with the plan of spending over $1 billion on the active wear brand. With this move, HanesBrands aims to utilize the proceeds to reduce its debts, as it explored various strategies in September for the then-struggling Champion.
Although several strategic players showed interest in Champion, the brand’s potential eventually led to the final deal with Authentic, a company that thrives on acquiring intellectual property and then partnering with other firms to rejuvenate brands.
“This strategic move demonstrates Authentic’s commitment to expanding its portfolio of iconic sports, lifestyle, entertainment and media brands and will increase its system-wide annual retail sales to more than $32 billion worldwide,” declared Authentic in a statement.
This buy boosts Authentic’s presence in the fast-growing active segment. The firm already owns Reebok, as well as Spyder, Eddie Bauer, Nautica, and more.
Over the last few years, the addition of new brands together with the expansion of live events has grown Authentic into a world-leading sports and entertainment licensing company. Bringing Champion into the fold further expands our position in this space.
Jamie Salter – chairman and CEO of Authentic
Champion was founded in 1919, and is a frequent collaborator within the fashion space, with previous partnerships including Rick Owens, Todd Snyder, and Supreme. It operates in over 90 countries, with more than 40 percent of its business hailing from outside North America.
“Our successful efforts igniting Reebok’s momentum in sports have created a playbook to achieve a similar feat with Champion. With expansive reach, differentiated channel strategy and a balanced strength across its women’s and men’s businesses, Champion has profoundly influenced sports culture. This is the perfect time for the brand to make a significant impact as women’s sports continue to broaden their presence and fandom worldwide,” stated Nick Woodhouse, the president and chief brand officer at Authentic.
The deal also provides HanesBrands with an opportunity to expand in innerwear through its brands, namely Hanes, Bonds, Maidenform, and Bali.
HanesBrands’ CEO, Steve Bratspies, believes that the sale will simplify the business structure, improve the financial statement, and enhance its operations. “As we begin the next chapter for HanesBrands, we believe we’re in an even stronger position to further extend our leadership in innerwear, pursue new cost reduction opportunities as we ensure we have the right operating structure in place, and advance our multi-year flywheel to drive strong shareholder returns,” Bratspies said.
Following the announcement of the deal, investors responded positively with HanesBrands’ shares rising nearly 4% to $5.25 in Wednesday morning trading.
Goldman Sachs & Co. and Evercore acted as advisors to HanesBrands for this deal. Authentic was guided by JP Morgan and BofA Securities in the proceedings.
