HanesBrands exits Europe and sells Outer Banks brand
WINSTON-SALEM, N.C. — HanesBrands is getting out of Europe, selling its division there, and also said Wednesday that it is putting its Outer Banks brand on the block and that it will exit its private-label business in the U.S.
The Imagewear division, which includes Europe, accounted for 8 percent of the company’s sales and HanesBrands anticipates restructuring charges up to $85 million to $95 million in the second quarter.
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.
All clothing companies have wrestled with rising costs for commodities like cotton, and the economic situation in Europe appears to be deteriorating.
Fears of contagion are now centered on Spain, where on Wednesday borrowing costs for the struggling country hit new highs for the euro era, closing in borrowing costs for seen in Greece and Ireland, countries that have sought bailouts.
The sale eliminates all of HanesBrands’ exposure to Europe.
The company will sell the European Imagewear unit for about $20 million to an affiliate of Smartwares B.V. Imagewear sells basic clothing to wholesales in the screen-print market.
Imagewear 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.
“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,” said Chairman and CEO Richard Noll.The sale of the European division is expected to close this week.
Last month, the company posted a loss of $26.8 million for the first quarter and revenue dipped 3 percent.
HanesBrands Inc., based in Winston-Salem, N.C., maintained its forecast for 2012 earnings of $2.50 to $2.60 per share Wednesday, excluding the cost of the recent maneuvers.
This article was provided by The Associated Press Wire. (Copyright 2012 by The Associated Press. All Rights Reserved.)