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Case analysis examines the implications of divesting Champion brand to improve HBI's financial performance, suggesting a potential strategic pivot.
This case describes a strategic decision faced by Hanesbrands Inc. (HBI). HBI experienced pressure from Barrington Capital Group L.P. (BCP), an activist investor, to improve its financial performance. BCP identified three areas of concern. The first issue was HBI's long-term debt. The second issue pertained to declining revenues and profit margins. The third issue was the decline in HBI’s stock price. BCP insisted on several actions including asset divestments, debt reduction, restructuring the product portfolio, and revamping upper management. HBI’s management, led by CEO Bratspies, announced several strategic options that included potential divestiture of the Champion brand to reduce long-term debt and improve cash flow. Students are asked to examine HBI’s situation and make a recommendation to retain or divest the Champion brand.
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Gopalan et al. (2025) studied this question.
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