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Sales decline at Hanesbrands outerwear segment

30 Jul '08
4 min read

In May, Standard & Poor's Ratings Services raised its corporate credit rating on Hanesbrands to BB- from B+, reflecting the company's strategic execution progress and positive operating momentum as a stand-alone company.

The company also launched its Hanes television, print and Internet advertising and marketing campaign featuring Michael Jordan and actor Charlie Sheen for Hanes Lay Flat Collar Undershirts and Hanes No Ride Up Boxer briefs, the brand's latest innovation in product comfort and fit.

Hanesbrands continues to make significant progress in expanding its supply chain in Asia as part of its global strategy of consolidating manufacturing into fewer, larger facilities in lower-cost countries.

In the second quarter, the company added three company-owned sewing plants in Southeast Asia - two in Vietnam and one in Thailand - giving the company four sewing plants in Asia. In Nanjing, China, construction is under way on the company's first Asian textile fabric plant, which is scheduled to start production in 2009. By the end of the year, the company expects to have more than 6,000 employees in Asia, triple the number at the beginning of the year.

Hanesbrands has reached planned fabric production levels at its off-shore textile facilities in the Dominican Republic and El Salvador. Further expansion is planned in El Salvador.

In addition, the company continues to streamline and refine its distribution network. In the second quarter, expansion of its Honduras distribution center was completed, doubling its size. That follows the completion in the fourth quarter last year of a mixing center in the Dominican Republic. Both centers ship directly to customers in the United States, utilizing the company's integrated networks of fabric production and sewing plants located in Central America and the Dominican Republic.

"We are focused on our improvement strategies to sell more, spend less and generate cash," Noll said. "We are executing our cost-reduction, debt-management and globalization strategies to increase profit while we continue to focus on improving sales performance."

Hanesbrands Inc

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