Major Acquisition in the Apparel Industry

Montreal-based Gildan Activewear Inc. is reportedly in the final stages of negotiations to acquire Hanesbrands Inc., a leading U.S. underwear maker, in a deal that could reach nearly $5 billion, including debt. Sources close to the matter revealed to Financial Times that an official announcement could be made by the end of this week, marking a significant shift in the apparel industry landscape.

Challenges Facing Hanesbrands

Hanesbrands, renowned for its iconic brands such as Hanes, Bonds, Maidenform, Bali, and Playtex, has been grappling with declining sales, reduced retail inventories, and increased production costs exacerbated by U.S. tariff policies. This year, the company's stock has plummeted by approximately 40%, contrasting sharply with Gildan's 20% rise over the past year.

Strategic Moves and Investor Pressure

The potential acquisition follows Hanesbrands' recent sale of the Champion brand for $1.2 billion, a move aimed at debt reduction. Both companies have faced pressure from activist investors, prompting strategic reevaluations. Gildan's CEO, Glenn Chamandy, recently expressed openness to acquisitions, despite a general preference for organic growth, signaling a pivotal moment for the company.