With its deep roots in Winston-Salem, North Carolina, it dominates the US clothing market with various brands under its umbrella, including Barley, Champion, Just My Size, Playtex, etc. The company was established in 1901, beginning with a collection of innerwear for both men and women. However, the company evolved with each passing year to emerge as one of the leading manufacturers and suppliers of casual and activewear. Currently, Hanes Inc. has its units in 40 different countries across the Globe.
Hanes being listed in the New York Stock Exchange as HBI is selling its products globally, rounding up more than 65% of the sales in America.
In comparison, 20% and 15% of its sales are generated by Europe and the Asia Pacific respectively. Unfortunately, to raise its profit margin and to avail low-cost labor services, HBI offshored its manufacturing to Thailand, Vietnam, China, etc.
Consequently, Hanesbrands’ per annum sales and profits caught up a significant growth and have continued to grow in the past few years.
Innovate to elevate: A decisive strategy
Hanesbrands has always followed its strategy of Innovate-to-Elevate to regulate and elevate its brand power, enhance its manufacturing platforms, and optimize the low-cost global supply chain.
As per CNBC, HBI shares upsurged to almost 25% after its substantial quarterly earnings. The significant rise in the profit was observed to be the outcome of the sales and growth. Hanes reported 38 cents/share profit, which was 9 cents more than the expected profit. Similarly, the revenue of 1.8 billion US dollars was also more than the estimated 1.64 billion US dollars. The sales trend of apparel sales sequentially enhanced across all business segments.
Global Champion sales significantly increased from the last quarter due to solid and consistent consumer demand and HBI’s collaboration with various online B2B stores successfully selling the Champion brand from their platforms.
HBI registered notable online sales growth to approximately 70% through its e-commerce websites, B2B clientele, retailer websites, and extensive web-based pure-plays. The HBI additionally sold PP (personal protective) garments that are worth $179 million globally. HBI is now focusing on its brand apparel, “Champion,” to increase its sale on observing the stock market. The company is also driving its sales and business growth through consumer-direct platforms such as physical and online stores.
HBI: The key to success
Hanesbrands’ key to success has always been the tactic of immediately reacting to the changing market demands and industry trends. The company is known for capturing the insights of changes in customer demand to timely develop new products within the current lines while modifying the core products.
The outbreak of COVID-19 has made a massive negative impact on non-essential retailers. HBI also had to suffer, but the company is tougher than others. HBI stock had witnessed far worse in the past. Mainly when its stock had a nosedive from $6 to $1 due to the 2008 downturn.
The stock lost around 76% of its value compared to the pre-crisis peak. However, HBI managed to remarkably recover to the level of approximately $5 in 2010. It was the rise by 245% between March 2009 and January 2010. The same is evident in 2020 when HBI has shown a remarkable rise with its “innovate to elevate” strategy after the pandemic crisis.
The rising strategy
In 2020 and 2021, the world was thinking that the crisis of Covid-19 would hit the company hard as their manufacturing plants are in China and Honduras.
However, Hanes surpassed the fear and came out on top with its strategic approach. HBI successfully adjusted its primary production to mass-produce the pure cotton masks approved by FDA. FDA (Food and Drug Administration) is a US federal agency.
The agency is responsible for protecting the nation’s health by ensuring efficacy, safety, and security of vet and human biological products, drugs, etc.
The product was perfectly aligned with the new global demand and norm. As a result, Hanes successfully sold millions of these masks to the military, FEMA, and other Federal institutions. Hanes broadened the production of these masks to reach millions to cater to businesses and resellers. It also ensures that the direct-to-customer channel is always stocked with premium products. As a result, HBI reported a year-on-year increase in its total revenue of 2020’s fourth quarter by 2.85% compared to its competitors.
HBI has used its large-scaled operations to its advantage even in the situation of COVID-19. The strategy has given the company a significant competitive edge in the market. Hanes Inc. has a global supply chain that surrounds markets in both the Western and Eastern hemispheres. The manufacturer used its combination of owned, outsourced, and contracted production operations to acquire a reliable and constant source of product supply and reduced product cost. In the last quarter of 2020, HBI shares gained 10.3% against the industry’s 9.1% rate.
Hanes: Achievement as a socially and environmentally responsible brand
As Hanes was progressively working to achieve the company goals year after year, it was also building up a reputation as an environmentally and socially responsible manufacturer. The Environmental Protection Agency of the US honoured Hanes with Energy Start Award for seven years consecutively; in acknowledgement of the company’s efforts to manage energy, Hanes was also ranked number two as America’s Greenest company by Newsweek’s 2012 list.
Ethisphere, an international corporation advancing standard ethical businesses, has recognized Hanes Brand Inc. as World’s Most Ethical Companies in 2021. The brand Hanes is one of the two apparel companies identified as most ethical among 135 companies in 22 countries and 47 industries.
Hanes not only takes the environmental and social effort as its responsibility as a global corporation but also considers it an essential business strategy.
Hanes believes that being socially and environmentally responsible adds value for internal and external stakeholders. The energy and water-saving practices saved more than 23 million US dollars to the company in 2012 and continue to do so. Thus, it is evident that the energy-conserving methods not only fulfill the company’s obligations towards the environment and society but also serve as a value addition to the company and its stakeholders.
A Socially and environmentally responsible brand
The social and environmentally responsible processes save costs for Hanes. It also creates a significant competitive edge for the company. The world leaders are all set to monitor the practices of countries and their organizations to limit the increase in global warming. However, the majority of the companies do not know their capacity to emit greenhouses gases. It is difficult for them to fulfill the global expectation of limiting hazardous gases emission.
On the contrary, Hanes has been focusing on environmental responsibility for a long time. Therefore, the company now has an established structure and process to measure and reduce its emissions and energy consumption accordingly.
It gives an edge to the company as a pioneer of an environmentally responsible producer. Hanes continues to focus on all the business aspects instead of scrambling to fit the new sustainable business model on the lines of new regulations and authoritative structures.
Hanes is entirely prepared to optimize its global supply chain’s scale, size, and production capabilities. The company has conducted a comprehensive business assessment in 2021 and has planned to implement the Full Potential plan. This plan is based on four pillars as a foundation of its growth and long term profitability
- Global growth of Champion brand
- Growth in Innerwear through the products and brands that are appealing to youngsters
- Building cross channel e-commerce excellence
- Streamlining global portfolio
To implement the Full potential plan, HBI has recognized 20 strategic initiatives to unleash the potential growth. HBI also has initiated a multi-year program for cost savings to self-fund. And the investments required to achieve the objectives of the Full Potential plan.
The company looks forward to presenting a comprehensive overview of its Full Potential plan in May. The company is forecasted to grow more in the apparel industry.
The final words
Today, Hanes is the world’s biggest brand of blank clothing. Hanes sweatshirts, undergarments, socks, shapewear, intimates, and tees are more popular than any other brand in the United States. Whether it Hanes t-shirts men’s or apparel for women, Hanes produces them with social and environmental responsibility. The company understands and cares about mother nature and has researched and included ecological stewardship into the business model. This has allowed Hanes to have a significant competitive advantage over others as organizations. All you need to follow the new regulations set because of global climate change.
The journey of Hanes Brand Inc. shows us that with ethical considerations, on-time decisions, instant reaction to market change. With its’s dedication to serving customers with quality products and services, a company can reach the top of the industry.