Champion Sportswear Sold to Authentic Brands Group in $1.5 Billion Deal

Champion, the more than century-old sportswear brand, has been acquired by Authentic Brands Group (ABG) in a deal valued at up to $1.5 billion. This move comes after years of pressure on Hanesbrands, Champion's previous owner, from activist investors to cut costs.

Champion, the iconic sportswear brand, is changing hands. Hanesbrands has sold Champion to Authentic Brands Group for up to $1.5 billion, marking a shift in ownership for the century-old company.

Shifting Strategies: Back to Roots for Hanes

Known primarily for its underwear and basic clothing lines, Hanes is aiming to refocus on its core business with the sale of Champion. This strategic shift allows them to streamline operations and potentially improve profitability.

ABG's Acquisition Spree: Adding Champion to its Portfolio

ABG, a company known for acquiring established brands like Reebok, Forever 21, and Quiksilver, adds Champion to its growing portfolio.  This deal further expands ABG's presence in the apparel market.

Champion's Appeal: Nostalgia Meets Challenges

While Champion has enjoyed renewed interest from millennials and Gen Z seeking retro sportswear, its recent performance has been lackluster. The brand's sales in the US plummeted 30% last year, attributed to a challenging market and excess inventory.

Market Challenges Impacting Industry Leaders

Champion's struggles are not unique. The entire activewear market has been facing headwinds, with consumers cutting back on discretionary spending. This trend has negatively affected major players like Nike, Under Armour, and even Lululemon despite its higher price point.

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Shifting Retail Landscape: The End of C-9 Champion at Target

The expiration of Champion's exclusive C-9 Champion line with Target in early 2020 further impacted sales. As Target focused on its own private-label brands, Champion attempted to transition the C-9 line to Amazon, but its impact remains to be seen.

Looking Forward: Champion's Future Under ABG

The acquisition by ABG presents an opportunity for Champion to revitalize its brand strategy. ABG's expertise in brand management and its growing portfolio could pave the way for Champion's future success.

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Source: CNN