After a weeks-long bidding process, Authentic Brands Group emerged victorious after agreeing to buy athletic apparel brand Champion from HanesBrands Inc. for just over $1 billion.
“Champion agreed to the takeover by ABG last Friday or Monday,” said a source familiar with the negotiations. “They should be completed in late May or early June.”
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A formal agreement has not been signed yet, but rumors suggest something could be in writing next week. Sources say Delta Galil, Sycamore Partners, G-III Apparel and WHP Global were also interested in the label.
Sources warned that the purchase by Authentic Brands could result in the loss of thousands of jobs worldwide as the intellectual property management company will outsource much of the manufacturing, design, logistics and operations of the label’s various components to other companies.
HanesBrands put its second-largest label up for sale last year, initially seeking at least $1.4 billion after Champion sales fell sharply in recent years. HanesBrands hired Goldman Sachs & Co. and Evercore to review strategic options for the more than 100-year-old label, which supplied all of the uniforms for National Basketball Association teams in the 1990s.
Champion’s sales have declined over the past two years, partly due to fewer collaborations with names like Supreme and Rick Owens. Global sales fell 23 percent in the fourth quarter of 2023, with the weakness attributed to both the strategic changes and the challenging sportswear market.
The sale of Champion provides a much-needed financial boost to HanesBrands. The company ended last year with net debt of $3.1 billion, 5.2 times its adjusted earnings before interest, taxes, depreciation and amortization.
In 2023, HanesBrands’ total revenue was $5.6 billion, down 9.58 percent year-over-year. Revenue in the fourth quarter of 2023 was $1.3 billion, down nearly 12 percent year-over-year. HanesBrands’ highest revenue years were 2021 and 2018, when revenue reached $6.8 billion.
HanesBrands, based in Winston-Salem, North Carolina, sought to redirect Champion’s course by changing its product mix and applying more discipline to product and channel segmentation. Just last December, the company hired Canada Goose’s Richard McCloud as vice president and chief marketing officer for Global Champion.
Founded in 1919 by the Feinbloom brothers as the Knickerbocker Knitting Company, Champion grew into a full-service retailer of men’s and women’s athletic apparel, including activewear, sweatshirts, T-shirts, sports bras, team uniforms, footwear and accessories sold in department stores, sporting goods outlets and specialty stores. HanesBrands’ other brands are Hanes and Bonds.
HanesBrands had a lucrative contract with many universities across the country, supplying campuses with Champion sweatshirts and other items bearing the university’s name, and sources say that model will likely continue.
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