Hanes has been under pressure from activist investors to cut costs. Known for its underwear brands and basic clothing lines, Hanes is getting back to its roots. Hanesbrands announced Wednesday that it will sell Champion to Authentic Brands Group in a deal worth up to $1.5 billion with performance incentives. Authentic owns brands such as Reebok, Forever 21 and Quiksilver.
But Champion’s sales tumbled 30% in the United States last year. Hanes blamed “challenging activewear apparel market dynamics” for Champion’s slump and excess inventory that hurt its profit. Many consumers have pulled back on discretionary clothing, a trend that has hurt Champion’s rivals such as Nike and Under Armour. Lululemon, which has higher prices than Champion, has also struggled.
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