Hanesbrands Investors Should've Seen Target Cancellation Coming
(Bloomberg) -- Hanesbrands Inc. lost about one-fifth of its market value Wednesday on news that Target Corp. won't renew an exclusive deal for a line of Champion athletic wear that expires at the end of January 2020. But the writing has been on the wall since last year.
Target introduced its own activewear line, JoyLab, just over a year ago, part of a broader push to add more than a dozen store brands across key categories like home decor and apparel. At the time, the cheap-chic retailer said it was happy with its C9 line by Champion -- a unit of Hanesbrands -- but profit margins on store brands are much higher compared with giving a cut to a partner.
The Champion brand's heyday was the 1990s, when its sweatshirts were worn by everyone from high-school jocks to hip-hop stars, and it became the exclusive uniform maker for the NBA. Hanesbrands has found some success reviving the Champion brand -- which turns 100 next year -- by entering partnerships with trendy fashion lines like Supreme, Undefeated and Vetements.
While the C9 line had $380 million in sales at Target in the past twelve months, according to a statement Wednesday, Hanesbrands still projects sales of more than $2 billion worldwide for it by 2022.
Hanesbrands shares tumbled as much as 19 percent to $17.92 in New York, their biggest intraday drop since 2009. Target fell as much as 2 percent to $79.03.
To contact the reporter on this story: Matthew Boyle in New York at mboyle20@bloomberg.net
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Lisa Wolfson, Anne Riley Moffat
©2018 Bloomberg L.P.
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
