Apparel manufacturer Hanesbrands (NYSE: HBI) leaned into the pandemic last year by spinning up a business in personal protective equipment (PPE) that helped offset sales declines in the core innerwear and activewear businesses. While the move helped boost revenue, the company no longer sees PPE as a long-term growth opportunity.
Along with its fourth-quarter report, Hanesbrands announced its new Full Potential Plan, designed to drive growth and improve profitability. Under the plan, the company will aim to grow the Champion brand, boost the innerwear business by focusing on younger consumers, up its game in e-commerce, and streamline its product portfolio.
As part of the streamlining initiative, Hanesbrands is dropping about 20% of its stock keeping units (SKUs) and putting PPE on the back burner. The company wrote off $611 million of inventory related to this plan, including a $400 million write-off of its entire PPE inventory and $211 million in its dropped SKUs. Hanesbrands is also exploring strategic alternatives for its European innerwear business. A sale would further simplify the company's operations.
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Hanesbrands to Focus on Champion, Young Consumers, and E-commerce