Who’d Want to Buy Champion?
After 114 years, Champion Athleticwear faces an uncertain future.
Owner Hanesbrands Inc. is weighing strategic options for the brand and could put it up for sale. So who might be interested in buying the activewear label?
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Sporting goods and retail industry analyst Matt Powell of Spurwink River doesn’t see “much appetite for acquisitions right now.”
For Champion, he added, there “does not seem to be an obvious acquirer.”
Powell pointed to big companies like Wolverine Worldwide, which sold the Champion footwear licensing rights back to Hanesbrands a year ago, that are getting rid of brands. On the other hand, “brand harvesters” such as Authentic Brands Group “could be in the hunt,” he said, nothing that a fashion company without an athletic presence could be interested in getting into the athleisure business.
Financial experts who spoke on the condition of anonymity also drew some blanks, quickly dismissing the names that came up.
VF Corp. was floated as the most likely contender. It’s a big player in the outdoor sector, but a stacked portfolio of brands including The North Face, Altra and Icebreaker focuses on products for active lifestyles. Some doubt whether Champion offers that same appeal, even though it’s billed as a “lifestyle brand born from sport.”
Champion’s roots are in gym apparel. High school and collegiate athletes have long worn Champion sweats and hoodies on and off the field. The iconic 1950s red, white and blue signature “C” logo became ubiquitous when the brand partnered with the National Collegiate Athletic Association, or NCAA, a decade later, and the National Football League in the 1970s.
But Champion lost some brand cachet in the new millennium as newer players entered the market and the athleisure trend exploded into a full-blown lifestyle for many Americans.
A former retail executive said the M&M collaborator regained some street cred around 2017, finding fans in the hip-hop and streetwear scene. But just as those fads flare up and fizzle out, Champion soon seemed to fall out of favor again. Sources said the problem centers on brand perception. Champion is viewed by many as a core—but uninspired—basics line. It has a great reputation for quality, but likely wouldn’t be the top choice for anyone looking for something fashionable.
Champion’s new global campaign aims to modernize the brand. “Champion What Moves You” taps rappers, street artists and shoe cobblers who tell their stories on how they create with a purpose.
“In this next chapter of our brand story, we are redefining what it means to Champion—for us it is no longer a title or indication of winning, but rather, a means to take action and create something with real impact,” Vanessa LeFebvre, Champion’s president of global activewear, said. “To be a Champion is to pursue your passion, to create, and to Champion What Moves You.”
Hanesbrands is facing many of the difficulties challenging the apparel industry today. This summer it said slow consumer demand and inventory glut weighed on the activewear category. Global Champion brand sales fell 16 percent in the second quarter from a year earlier, including a 25 percent decrease in the U.S. and a 1 percent decline internationally.
Walmart and Target are possible Champion acquirers, according to one retail expert. While Target’s creative team would know how to inject novelty and fashion into the Champion brand, Walmart’s name was quickly crossed off the list, given how it’s been burnt by past deals.
Financial and retail sources threw out a variety of other names. One source who mentioned Under Armour isn’t convinced the Baltimore athletic player has the appetite to pursue a deal, especially after it sold off MyFitnessPal and shut down the Endomondo fitness tracking platform after trying to target the hardcore fitness community. Like Under Armour, Dick’s Sporting Goods also sells the Champion brand. But it’s previously shown an interest in acquiring outdoor brands, like when it bought Moosejaw from Walmart.
With a new license for Champion and C9 Champion outerwear in North America, G-III Apparel Group was cited as a possible contender to fully take over the brand. Earlier this month, Hanesbrands said the two were “exploring opportunities across Champion’s global network as a key partner.”
“Our vision is to build on the brand’s legacy and create quality heritage pieces which complement and enhance Champion’s principles of self-expression,” G-III executive vice president Jeffrey Goldfarb said at the time. “This license aligns perfectly with G-III’s core competencies in outerwear, is a strong complement to our other brands, and will fit seamlessly into our already well-developed outerwear divisions and global network.”
One financial source noted that with PVH Corp. taking the Calvin Klein and Tommy Hilfiger licenses in-house, G-III could be looking at deals to replace the lost revenue. But that all boils down to price. It’s unclear what Champion might be worth on the open market.
Reinvigorating Champion with fashion-forward energy isn’t an impossible task, said one turnaround expert, but whoever takes this on needs the deep pockets and commitment to really see it through. An appearance on Amazon’s “Making the Cut” reality fashion design competition series last year tried to position the label in the fashion conversation. Hanesbrands might not have the stomach to take on the challenge of giving Champion a glow-up, given its high debt, an activist investor breathing down its neck and recent moves aimed at cutting costs.
And if Hanesbrands can’t get the price it wants but still wants to sell, that’s when brand management firms like Authentic could get into pole position. Authentic Brands would most likely acquire the IP and leave the operational responsibilities to SPARC, the joint venture it runs with Simon Property Group. That’s the playbook it followed with Reebok.
