HanesBrands, maker of Hanes and Champion activewear and graphic apparel, purchased better basics brand Alternative Apparel in an all-cash deal worth about $60 million. The transaction, which was funded with cash on hand and funds from a revolving credit facility, closed on Oct. 13.
Hanes said the deal allows it to “create value and generate growth opportunities” in support of its activewear strategy. Hanes CEO Gerald Evans Jr. said, “We will be able to leverage our global low-cost supply chain, which is a recognized social, environmental and ethical leader, with another strong brand to expand our market and channel penetration, including online.”
Alternative, which had been outsourcing, will now be able to tap into Hanes’ owned factories.
Alternative CEO Evan Toporek, who will continue to lead the business, said he’s looking forward to scaling the business through the Hanes supply chain. “Partnering with a like-minded company that is a longtime industry innovator and leader will benefit our employees, our customers, and our brand as a whole,” he said.
Launched in 1995, Alternative Apparel has been known for comfort, style and social responsibility. Hanes estimates the company’s full-year net sales will reach $70 million.
“Alternative Apparel has an attractive business model, a very strong and differentiated brand, and a highly talented team of employees,” Evans said. “Adding the Alternative brand and product lineup further diversifies our sales mix as we emphasize growth across all channels, including online.”
Over the last several years, Hanes has been aggressively adding to its portfolio through the acquisition of licensed logo companies Gear for Sports, which sells through college bookstores, and Knights Apparel, which focuses on the mass tier. It also acquired GTM Sportswear, makers of custom high school team and fan apparel. Hanes also launched Hanes Ink, an online business that creates custom college and high school garments.
Along with the Alternative announcement, Hanes also released preliminary third quarter results. The company estimates net sales will be around $1.8 billion with earnings per share of 55 cents.