Hanesbrands Inc. said Wednesday that it is getting out of European apparel sales by selling its imagewear division there for $20 million to an affiliate of Dutch consumer goods company Smartwares B.V. for 15 million euros ($18.80 million). The deal was signed Friday. It is expected to close this week.
"With our exit from Europe, we can devote all of our energies to growing our branded portfolio in core geographies in the Americas and Asia," Richard Noll, the company's chairman and chief executive, said in a statement. Hanesbrands said in April that it was reviewing its plans for the European imagewear division, which sells basic apparel to wholesalers in the screen-print market.
As advanced by the company in a statement, the deal will lower its sales by about $60 million during the second half of the year. There are no job cuts involved in the restructuring, said spokesman Matt Hall.
"Virtually all of the product sold by European imagewear was sourced from suppliers, so no impact on company-owned production facilities," Hall said. "This was our only existing European business," Hall assured. The sale eliminates all of HanesBrands’ exposure to Europe (it accounted for the 8% of total business). Imagewear sells basic clothing to wholesales in the screen-print market.
The sold division will change its name to branded printwear and concentrate on the Hanes and Champion brands in the U.S. Annual sales are expected to be approximately $150 million in 2013. "We are a branded company," Noll said. "That includes being committed to branded printwear in the United States where we can partner with our wholesale customers to take advantage of our strong consumer brands and product differentiation." Hanesbrands said it expects to have pretax charges in the second quarter ranging from $85 million to $95 million, substantially all noncash, related to the restructuring and branded decisions.
The company expects no other restructuring actions for imagewear or any additional charges related to imagewear or any other aspect of its business this year. The restructuring will reduce net sales by $60 million, primarily in the second half of fiscal 2012. But it said the sales decrease "will have an insignificant impact on operating profit." Company´s previous 2012 diluted earnings guidance was of a range of $2.50 to $2.60 a share.
"With our exit from Europe, we can devote all of our energies to growing our branded portfolio in core geographies in the Americas and Asia," Richard Noll, the company's chairman and chief executive, said in a statement. Hanesbrands said in April that it was reviewing its plans for the European imagewear division, which sells basic apparel to wholesalers in the screen-print market.
As advanced by the company in a statement, the deal will lower its sales by about $60 million during the second half of the year. There are no job cuts involved in the restructuring, said spokesman Matt Hall.
"Virtually all of the product sold by European imagewear was sourced from suppliers, so no impact on company-owned production facilities," Hall said. "This was our only existing European business," Hall assured. The sale eliminates all of HanesBrands’ exposure to Europe (it accounted for the 8% of total business). Imagewear sells basic clothing to wholesales in the screen-print market.
The sold division will change its name to branded printwear and concentrate on the Hanes and Champion brands in the U.S. Annual sales are expected to be approximately $150 million in 2013. "We are a branded company," Noll said. "That includes being committed to branded printwear in the United States where we can partner with our wholesale customers to take advantage of our strong consumer brands and product differentiation." Hanesbrands said it expects to have pretax charges in the second quarter ranging from $85 million to $95 million, substantially all noncash, related to the restructuring and branded decisions.
The company expects no other restructuring actions for imagewear or any additional charges related to imagewear or any other aspect of its business this year. The restructuring will reduce net sales by $60 million, primarily in the second half of fiscal 2012. But it said the sales decrease "will have an insignificant impact on operating profit." Company´s previous 2012 diluted earnings guidance was of a range of $2.50 to $2.60 a share.
