HanesBrands said Wednesday that it has agreed to sell its Champion line of clothing to Authentic Brands for $1.2 billion, two months after Women’s Wear Daily reported the deal was pending.
The Winston-Salem-based company could receive an additional $300 million from New York-based Authentic, based on how the Champion business performs.
HanesBrands announced last year that it was considering selling the business to pay down debt and focus on its other brands, which include Hanes, Bonds, Maidenform and Bali. In the fourth quarter, Champion sales fell by 23% and the company wrote down the value of $59 million worth of Champion apparel in 2023.
“The successful completion of this transaction further simplifies our business, deleverages our balance sheet and enhances the company’s operations and financial performance,” said HaneBrands CEO Steve Bratspies in a statement.
The global Champion business generated approximately $75 million of adjusted EBITDA earnings during the 12 months ending March 30, according to HanesBrands.
Authentic includes business such as Eddie Bauer, Brooks Brothers, Rockport and Reebok.
“”We are excited to acquire Champion, a brand that shares our pioneering spirit,” said Authentic Brands CEO Jamie Salter. “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.”
Champion started in 1919 as Knickerbocker Knitting Mills and is credited with introducing the first hooded sweatshirt in the 1930s. The company also invented the first sports bra. Its famous C logo first appeared on Notre Dame basketball jerseys in 1978, and it outfitted the Olympic basketball Dream Teams in 1992 and 1996.
Champion was acquired in 1989 by Sara Lee, which spun off the HanesBrands business into a separate company in 2006. It currently operates in more than 90 countries, with more than 40% of its business hailing from outside North America.
Authentic plans to convert the Champion business into a licensed model with a global footprint. The company is in discussions with several operators in key regions to manage the manufacturing, physical retail, e-commerce and wholesale operations of the business.
HanesBrands shares rose 25 cents, or 4.9%, to $5.30 on Tuesday. Shares have traded between $3.54 and $5.86 in the past year. The company has been under pressure from activist investors to improve its performance.
The deal is expected to close by the end of this year.
