Winston-Salem - Hanesbrands has entered into a definitive agreement to acquire Australian intimate apparel retailer Bras N Things.
Reporting fourth-quarter and full-year 2017 results, including an 8 per cent dip in operating profits for the quarter, the apparel giant will pay US$400 million for the specialty retailer and online seller of intimate apparel in Australia, New Zealand and South Africa. In 2017, Bras N Things had net sales of approximately A$180 million (US$144 million).
The company, based in Sydney, sells proprietary bras, panties and lingerie sets through a retail network of approximately 170 stores and a fast-growing ecommerce platform (www.brasNthings.com). Its three-year compound annual growth rate is 11 per cent, and online sales last year increased 71 per cent and represent nearly 10 per cent of total sales.
The company operates 154 stores in Australia, 10 stores in New Zealand and 7 stores in South Africa.
With the acquisition, Hanesbrands says that its combined Australian commercial businesses would hold the number one market position in bras and the number one market position in panties in Australia, as well as the number one market position for underwear, socks and babywear.
“Bras N Things is a leading intimate apparel retailer and ecommerce business that is a strategic and natural complement to our very successful Bonds underwear business in Australia and New Zealand,” said Hanes Chief Executive Officer Gerald W. Evans Jr. “Bras N Things has a great business model that appeals to millennial consumers featuring core products supplemented by seasonal product offerings. This consumer-direct sales model has significant potential for expansion into other geographic markets. We are delighted that Bras N Things CEO George Wahby, who oversees a talented management team, will remain with our Hanes Australasia business unit.”
For the year and quarter ended December 30, 2017, full-year net sales increased 7 per cent to $6.47 billion, and fourth-quarter net sales increased 4 per cent to $1.65 billion. Organic sales, which exclude acquisitions under a year old, increased 2 per cent in constant currency in the fourth quarter, the second consecutive quarter of organic growth.
“2017 was a successful year during which we focused on diversifying our business to be able to consistently deliver annual topline growth,” said Evans. “We rebounded to achieve organic growth in the third and fourth quarters, including fourth-quarter organic growth for each of the Innerwear, Activewear and International segments. We have additional work to do, including addressing inflationary and short-term cost pressures, but our brands are strong, our key market shares are increasing, our international businesses are sizable and growing, and we are driving significant direct-to-consumer growth worldwide.
On a GAAP basis, which includes the effect of the tax charge related to U.S. federal income tax reform, the company reported a fourth-quarter loss per diluted share of $1.06, and full-year EPS was $0.17.
GAAP operating profit for the full year decreased 7 per cent to $723 million, and fourth-quarter operating profit of $120 million decreased 41 per cent.
When excluding the tax-reform charge, as well as pretax charges for acquisition integration and charges for other actions, full-year adjusted EPS of $1.93 increased 4 per cent and fourth-quarter adjusted EPS of $0.52 decreased from $0.53 a year ago. Adjusted operating profit of $916 million for the year increased slightly and fourth-quarter adjusted operating profit of $231 million decreased 8 per cent.
