Athletic apparel company tops $1.5 billion sales in agreement.
Hanesbrands is feeling the heat from investors who want the company to reduce expenses. Famous for its underwear and low-priced clothing lines, Hanes is returning to its foundation.
Hanesbrands revealed Wednesday that they will transfer Champion to Authentic Brands Group in a transaction valued at up to $1.5 billion, including performance bonuses. Authentic Brands Group owns several brands, including Reebok, Forever 21, and Quiksilver.
Champion, which was founded in 1919, has seen an increase in popularity among Millennials and Gen Z due to a revival of retro sports brands. However, Champion's sales nosedived by 30% in the United States last year. Hanes pinned the decline on "difficult market conditions in the activewear apparel sector" and an excessive inventory, damaging its profit margins.
Many customers have reduced their spending on non-essential clothing, causing trouble for rivals like Nike and Under Armour. Even Lululemon, which offers higher prices than Champion, has experienced difficulty.
Prior to 2020, Champion collaborated with Target to create the C-9 Champion line for over a decade. But the agreement ended as Target decided to focus more on their private-label brands. Since then, Hanes has been selling the C-9 line on Amazon.
