Authentic Brands Group has emerged as the winner of a bidding war for Champion after it secured an agreement to purchase the athleisure brand from HanesBrands Inc. for just over one billion dollars.
A source close to the situation confirmed the news to WWD, stating that the acquisition should close “around the end of May or early June”.
While the media outlet noted that no formal agreement had been signed yet, it was suggested that a more official deal could be put into writing next week.
The move reportedly could put at risk thousands of global job roles under Champion, as Authentic will likely take the brand under its wing through its usual method of outsourcing manufacturing, design and operations to third parties.
HanesBrands was understood to have put the struggling Champion up for sale towards the end of last year, placing a 1.4 billion dollar price tag on the sports label, according to various media reports.
HanesBrands in need of financing for escalating net debt
Under the lens of Goldman Sachs & Co. and Evermore, both of which had been appointed to oversee the sales process, the deadline to submit the first-round of bids had closed early February, with multiple interested parties being rumoured to have stepped forward.
The decision to offload the label came after attempts by HanesBrands to bolster its performance had not been fruitful.
While evidence of turbulence had already been seen last year, this continued into the current period with HanesBrands reporting in its latest financial results that Champion’s US sales decreased 30 percent, driven by “challenging activewear apparel market dynamics”. International sales, meanwhile, also took a 14 percent tumble on a reported basis.
For HanesBrands, the sale would also provide much needed financing, as the company faces a 3.1 billion dollar net debt, as revealed in a 2023 financial report.