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How Champion's Retro Resurgence Is Driving Hanesbrands

How Champion's Retro Resurgence Is Driving Hanesbrands

Hanesbrands Inc. (NYSE: HBI) has had a remarkable 2019 so far, with shares up over 49 percent year-to-date.

The resurgence of the company's Champion brand has certainly played a pivotal role.

Champion recently celebrated its 100-year anniversary and has recently harnessed its legacy heritage to ride the wave of retro fashion trends that do not seem to be going away anytime soon.

Unpaid A-List Influencers 

While some believe Champion is accidentally benefiting from the retro resurgence, the company has made some moves that mirror the ascension of competitor FILA, a mid-market brand with a strong retro heritage that embraced the streetwear movement and landed some key collaborations with luxury fashion brands.

“We have success with unpaid influencers wearing our products, such as Chance the Rapper, Selena Gomez, Justin Bieber and Bruno Mars," Dave Robertson, Champion's director of brand marketing, told Benzinga.

Collaborations with fashion designers and retail brands keep Champion fresh in the premium and lifestyle corners of the activewear market, he said.

"Noteworthy collaborations include Kith, Supreme, Off-White, Urban Outfitters, Inc. (NASDAQ: URBN), Todd Snyder and Vetements."

Champion’s grassroots marketing strategy has paid dividends: its Instagram following has grown from 200,000 in 2017 to more than 4.9 million followers today.

A $2-Billion Goal

A perfect storm of key collaborations, timing and trends have led the brand to generate double-digit growth across all geographies for the past two years.

Champion has a goal to reach $2 billion in global sales by 2022, up from roughly $1 billion in 2017, Roberts said. Champion’s global sales increased 36 percent in 2018 to $1.36 billion, and the company is projecting 30-percent growth in 2019.

Part of the reason for the company's success is that its heritage is rooted in sportswear, and it is not known for its performance products. This is arguably a perfect combination at a time when athletically inspired clothing is performing well and technical performance wear is less desirable.

Champion is focused on three fundamental growth strategies for Champion globally, Roberts said: driving core business and expanding distribution; expanding consumer-directed sales; and expanding into new geographies.

“The fast-growing $180-billion global activewear market is predominately branded and skews toward graphic apparel, both strengths for Champion, which is supported by a predominately company-owned large-scale supply chain that incorporates product design, manufacturing and graphic capability,” the marketing chief said.

The brand has a notable presence in Foot Locker, Inc. (NYSE: FL) stores, and Champion was mentioned seven times on the retailer's fourth-quarter earnings call March 1 — an unheard-of notion just a few years ago.

Champion said it has a three-year CAGR of more than 30 percent online and more than 9 percent in company-owned stores. The brand has opened five marquee stores in the U.S., with plans for more to come. Overall, the company plans to have more than 250 stores by 2022.

Until a shift in trends occurs, it appears Champion will be riding the retro fashion wave to completion.

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Photo courtesy of Champion.


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