April 2024 news: Brand management company Authentic Brands Group (ABG) agreed to buy the trendy brand Champion from HanesBrands (about 7.25 billion yuan) at a price of slightly more than 1 billion US dollars (about 7.25 billion yuan), but this is much lower than the previously reported bid price of 1.4 billion US dollars.
According to public information, Champion was born in 1919, more than 50 years before Nike. As a world-renowned sports fashion brand, it has created a number of firsts, including the first sweatshirt woven with horizontal stripes, the first hooded sweatshirt, the first reversible T-shirt, the first nylon mesh football jersey, the first women's sports Bra, the first breathable mesh shorts, etc.
Headquartered in Winston-Salem, North Carolina, the parent company is the largest underwear manufacturer in the United States and one of the world's largest textile manufacturers, with brands such as Hanes, Playtex, Bali, Bonds, Wonderbra and DIM, with 48,000 employees in 29 countries, 88% of which are located outside the United States, mainly in Central America, Asia and the Caribbean.
Back 105 years ago, Simon Feinbloom and his two sons, Abraham and William, founded a knitting company in Rochester, New York, called Knickerbocker, which mainly produced knitwear, sports socks and simple sportswear. In 1923, the first knitwear with the word "Champion" was born. In the 30s, the company officially changed its name to Champion, which is still used today.
What really makes the brand famous are two patented technologies: one is Reverse Weave, as the name suggests, it is to keep the fabric on the edge of the garment in the direction of straight or horizontal grain as much as possible, which solves the problem of easy deformation and shrinkage of clothing. Based on this technology, Champion also designed and produced the first-ever hooded sweatshirt. The second is flocking printing technology, which enables mass production of clothing printed with the school name and school emblem, thus successfully opening up the university market, providing college sportswear for many schools, including the University of Michigan, and becoming the official partner of the Association of American Universities.
After that, Champion began to develop into a professional sports brand, first with the NFL (American Football League), NCAA (National Collegiate Athletic Association) cooperation, then for some NBA (American Professional Basketball League) teams to sponsor game uniforms, in 1990 officially obtained the NBA official equipment dealer franchise, becoming the official clothing supplier of 27 teams.
At the 1992 Barcelona Olympics, the "Dream Team" led by Michael Jordan wore the jersey sponsored by the Champion. He went on to appear as the official sportswear sponsor of the U.S. delegation at the 1994 Winter Olympics in Lillehammer and the 1996 Atlanta Olympics.
Unfortunately, the rise of brands such as GAP, H&M, and Uniqlo has made the clothing market more competitive, which has largely squeezed the market space of Champion, which takes the cheap and people-friendly route. After being taken over by Hanbai Company in 06, it slowly stopped the decline.
With the rise of trendy sports and social media, the brand has a "second spring". With frequent co-branding with trendy brands such as Supreme, Off-White, Vetements, Bape, Stussy, and UNDEFEATED, the popularity and sales have been further enhanced. Kanye, Asap Rocky, Justin Bieber, Rihanna, Yang Mi, Li Yuchun, Yue Wenle and other stars walking on the street wearing Champion sweatshirts or sweatpants have set off rounds of panic buying frenzy.
In 2017, Champion advanced to the $1 billion club. In September of the same year, it opened its first store in Chinese mainland in Hangzhou, and expanded 15 stores in more than 10 cities in the following year. In September 2018, the first flagship store in the Chinese market was opened in Sanlitun, Beijing, and 30,000 pieces of clothing were sold out in a week. [Note: This trendy brand only realized the layout of the Chinese market in 2015 and entered Tmall to open an official overseas flagship store]
But just three years and two months later, in November 2022, the flagship store of Taikoo Li Sanlitun in Beijing officially closed. Behind the store closures, corresponding to Champion's worrying performance, its global sales have declined for seven consecutive quarters from the second quarter of 2022 to the fourth quarter of 2023, and the decline has accelerated in the last three quarters, at 15%, 20% and 24% in constant exchange terms, respectively.
The situation of Hanbai is also precarious, with global sales falling 9.6% year-on-year to US$5.6 billion last year, and net debt reaching US$3.1 billion by the end of 2023, with an asset-liability ratio of 92.57%. As the company's second largest brand and the brand with the widest sales network, Champion has no choice but to become a "victim" of selling itself to pay off its debts.
Founded in 2010, ABG's main operating model is to acquire poorly managed brands at low prices, including Forever 21, Brooks Brothers, Barneys Department Store, Hunter, etc., and bring the brands back to life through repositioning, packaging upgrades, cooperative licensing or expansion of markets and categories, and restructuring. Its acquired brands have annual global retail sales of more than $29 billion and a retail network spanning 150 countries. Under the leadership of the new "Golden Father", will the Champion still have a chance to ascend to the "Champion" throne again?