Hanesbrands’s Champion Journey from Basic Sportswear to Top of the Line Streetwear
Hanesbrands Inc (NYSE: HBI), with its deep roots in Winston-Salem, North Carolina, is dominating the US clothing market with various brands, including Just My Size, Champion, Playtex, Barely, and several others. When founded in 1901, they only had a range of men and women innerwear, to begin with. However, over time they evolved and emerged as a leading manufacturer of activewear and casualwear. Now they have spread their wings to 40 different countries across the Globe.
Hanes sells its products globally, rounding up more than 65% of the sales in America, while Europe and the Asia Pacific respectively generate 20% and 15% of its sales. Unfortunately, to raise its profit margin and avail low-cost labor services, the company offshored its manufacturing to Thailand, Vietnam, China, etc. its annual sales and profits have been growing over the past few years.
NYSE: HBI headquarter and corporate offices in Winston-Salem: l
Innovate to elevate: Champion sportswear to streetwear
The American Apparel brand has always followed its strategy of Innovate-to-Elevate its brand power, manufacturing platforms, and optimize the low-cost global supply chain.
As per CNBC, the company shares boosted nearly 25% following its hefty quarterly earnings. The boost was observed to be resulting from its streetwear sales and growth in the Champion, confirmed the earnings of 38 cents/share, which was 9 cents above the estimated amount. Similarly, the revenue at $1.8 billion was also higher than the forecasted $1.64 billion. The trend of apparel sales sequentially enhanced across all business segments.
Moreover, global Champion sportswear sales significantly increased from the last quarter due to solid and consistent consumer demand and the company’s collaboration with various online B2B stores that successfully sell Champion brand from their platforms. Hanes registered notable growth of online sales to approximately 70% through its e-commerce websites, B2B clientele, retailer websites, and large web-based pure-plays. It additionally sold PP (personal protective) garments that are worth $179 million globally. On observation of the stock market, the company is now focusing on its brand apparel “Champion” to increase its sale. The company drives its sales by evolving Champion and growing it from basic sportswear to top-of-the-line streetwear after the pandemic.
The rising strategy
During (2020-2021), when the world was thinking that Hanes will be hit hard by the crisis of Covid-19 due to their manufacturing plants in China and Honduras, they surpassed the fear and came out on top with its strategic approach. The producers successfully adjusted their primary production to produce FDA-approved all-cotton masks, the new global norm, and demand and sold millions to FEMA, Military, and other Federal government institutions. The lines were extended in millions to cater to businesses and resellers while ensuring that the direct-to-customer channel is always stocked with premium products. As a result, Hanes reported a year-on-year increase in its total revenue of2020 4th quarter by 2.85% compared to its competitors.
Hanes Non-med all-cotton masks:
Hanes used its large-scaled operations to its advantage even in COVID-19, which has given the company a significant competitive edge in the market. Its global supply chain spans both the Eastern and Western hemispheres. The company used its mix of owned, sourced, and contracted manufacturing operations to acquire a reliable and constant product supply source and reduced product cost. In the last quarter of 2020, its shares gained 10.3% against the industry’s 9.1% rate.
Hanes competitive analysis https://www.nasdaq.com/articles/Hanesbrands-hbi-q3-earnings-sales-surpass-estimates-2020-11-05
The future plan
Hanes (NYSE: HBI) is all set to further optimize its global supply chain’s scale, size, and production capabilities. The company has conducted a comprehensive business assessment in 2021 and has planned to implement the Full Potential plan. This plan is based on four pillars as a foundation of its future growth long term profitability
- Global growth of Champion brand, sportswear plus streetwear
- Growth in Innerwear through the products and brands that are appealing to youngsters
- Building cross channel e-commerce excellence
- Streamlining global portfolio
To implement the Full potential plan, this American brand has 20 strategic initiatives to unleash the potential growth. The brand also has initiated a multi-year program for cost savings to self-fund the investments required to achieve the objectives of the full-proof plan. The company looks forward to presenting a comprehensive overview of its Full Potential plan in May, i-e, at its virtual Investor Day event.
Melissa D Miller as a Marketing executive at ApparelnBags. She has a keen interest in digital marketing and learning new trends.
She loves traveling, exploring new places, photography, public speaking, and likes to blog about her experiences.
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