HanesBrands has expanded its global Champion activewear brand in the Eastern Hemisphere by acquiring the assets of TNF Group Pty Ltd, a major activewear supplier serving leading Australian sportswear retailers.
The acquisition of TNF, which was already selling HanesBrands' Champion activewear products in Australia and New Zealand under a license and distribution agreement, expands HanesBrands into the outerwear segment in Australia, complementing its Playtex intimate apparel and emerging Hanes basic comfort apparel businesses there.
Established in 2002, TNF Group's activewear sales last year were approximately $20 million (U.S.), including the licensed Champion sales. HanesBrands bought the TNF assets for $9 million, or less than seven times earnings before interest, taxes, depreciation and amortization.
HanesBrands' strategy for its International segment businesses, which contributed 12 percent of total company sales last year primarily in fast-growing countries in the Americas and Asia, is to focus on the core categories of basic apparel, intimate apparel, and activewear using its global brands of Hanes, Wonderbra, Playtex and Champion. With the TNF assets, the company expands its Champion activewear brand that is already established in Japan and elsewhere in Asia.
Already with strong results in the first quarter, Hanes expects its 2011 International sales growth to be in the high teens or better. Last year, International sales increased 16 percent.
“Our accelerating international growth is duplicating our success in the United States by increasing market share through strong consumer brands in core categories supported by our low-cost global supply chain,” said Hanes Chairman and Chief Executive Officer Richard A. Noll. “This model should allow us to sustain substantial International growth for years.”
The acquired TNF business sells activewear and sportswear to sports and retail stores under the Champion, Leluu, Performax, and Track N Field brands. It also sells custom sports clothing to Australian private schools, and operates three retail stores.
Approximately 60 employees, primarily in sales, service, production, administration and distribution, will join HanesBrands, and management will remain in place at offices in Scoresby, Victoria.
“We are excited to add the TNF business and team to create significant growth opportunities in Australia and New Zealand,” said Gerald Evans, co-operating officer and president of international businesses for HanesBrands. “TNF's activewear business, which had continually expanded Champion sales since the 2009 license agreement, has an outstanding management team and workforce that are the best in their category and fit well with our growth culture.”
The acquisition will not materially affect HanesBrands' 2011 guidance for total sales of $4.9 billion to $5 billion and earnings per diluted share of $2.70 to $2.90.
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