Smart, Sustainable Apparel

Hanes Brands Australia

The garment industry is dynamic. Particularly at the retail level, brands come and go and goods change hands at margins that would make a supermarket weep. Consolidation has been taking place throughout the industry, on both the brand side and the supply side, and in Australia (with its potential limited somewhat by its relatively small population) the business has conformed to the global pattern.

Hanes is big. In the US, it sells more of what Americans term “intimate apparel” than any other company and it controls numerous brands of underwear and sportswear for men and women. Worldwide, the company’s sales top US$5 billion annually and its workforce around the world exceeds 51,000 people.

Hanes sells bras, panties, shapewear, sheer hosiery, men’s underwear, children’s underwear, socks, T-shirts and other activewear in the United States, Canada, Mexico and other leading markets in the Americas, Asia and Europe.

Track n Field®, the Australian brand, run by Guy Tuthill, used to distribute the Champion® brand throughout Australia. Three years ago Hanes purchased the TnF business, at a point where TnF had outgrown its old premises and moved to new ones in Scoresby for further expansion.

The US company has a veritable rack-full of brand names: Hanes itself, Champion®, Playtex®, Bali®, Flexees®, JMS/Just My Size®, Barely There®, Wonderbra® and Gear for Sports®. It recently purchased the half-billion dollar bra brand Maidenform®. Its international brands include Zorba®, Sol y Oro®, Rinbros®, Track N Field® and Ritmo®.

For the Australian operation, there are three divisions to the company: Champion® sportswear; the inner wear division featuring Hanes®, Playtex® and Wonderbra®; and Champion Teamwear®, which specialises in team strips for a wide variety of sporting applications. “Having the backing of a major supply chain has kept the business competitive. Small players cannot survive in today’s fast paced market. Since the buy out the Australian business has doubled,” says Guy. “Our mission is to Grow Champion into the 3rd biggest sports brand in Australia; with our competitive supply chain and broad distribution it has shown considerable growth of the last three years. Hanes® and Maidenform® are also brands we see as great opportunities for Australia.”

Hanes Brands Australia is part of what Guy sees as a rationalisation process in the industry domestically as smaller local companies find it increasingly challenging to compete against global opposition. Those smaller companies are finding the online retailing revolution a hurdle they cannot jump. “The online business today is where the big clearance-house stores were a decade or so back. In the future, if you are not big and strong, you will find it hard to survive. There will be opportunities to acquire businesses moving forward.”

Hanes has four retail outlets but is not planning to expand into a high-street chain. Guy would rather expand the brand’s presence in well-known department stores.

The Champion Teamwear® business is booming. This line is partly aimed at schools and new prestige clients are Caulfield Grammar, redesigning other top Melbourne school’s sports kits. But sports teams of all kinds are potential customers. “If you want 50 AFL jumpers or 50 basketball tops, we can supply. We offer a very good service, both locally and offshore, with some strong new fabrics and new designs.”

A couple of years ago, a Kiwi journalist bought a pack of underpants in a warehouse in Christchurch and started to ponder how it could arrive, packed and ready, so cheap. “As for a pack of five pairs for NZ$8.59, well, the economics of it is beyond me,” wrote Joe Bennett in Where Underpants Come From, in which he unravelled the supply chain back to its origins in – inevitably – China. To be sure, the garment industry is almost exclusively dependent on just a handful of countries (Bangladesh is a tragically well documented recent case; others are Cambodia, Vietnam and to a decreasing extent Thailand, which has priced itself out of the market) led by China, which also makes more pairs of shoes per year than there are people on Earth. The industry that gets its products there has to take extreme care these days to source ethically and yet remain price-competitive, for as Bennett highlighted, the margins are wafer-thin at every stage.

Guy says the significant advantage Hanes enjoys is its supply chain. “It’s just amazing,” he says. Hanes is also said to be number one in compliance, investing substantially each year on ensuring its suppliers’ labour forces are properly treated and paid. This is not just pure CSR or PR – Guy is negotiating with a major sporting body about contracts and supply and is being asked searching questions about whether the people he is dealing with are socially compliant. “It is a very serious matter these days,” he says, “and it can be a real competitive advantage for us because Hanes is so strong in this area.” But it is interesting to note that the US company says that, “unlike most apparel companies, Hanes primarily operates its own manufacturing facilities. More than 90 per cent of the apparel units that we sell worldwide and in the US are manufactured in our own plants or those of dedicated contractors.”

The future looks strong and the Australian team of around a hundred staff is solid. The US and Australia share the same vision for the business and are working to double the Australian business in the next three years. “Walmart is the biggest soft-goods supplier in the world. Hanes is the biggest supplier to Walmart. It’s a pretty powerful line.”

For more information about Hanes Brands Australia, please visit http://www.tnfgroup.com.au.

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