Hanesbrands
Inc.
(336) 519-4400
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news release
FOR IMMEDIATE RELEASE
News Media,
contact: Matt
Hall, (336) 519-3386
Analysts and
Investors, contact:
HANESBRANDS INC. ANNOUNCES
LATEST PROGRESS IN SUPPLY CHAIN STRATEGY TO BALANCE GLOBAL PRODUCTION AND
FURTHER IMPROVE COST COMPETITIVENESS
Additional Streamlining Consolidates Production into
Fewer and Bigger Facilities, Increases Alignment of Sewing Production in
The latest supply chain streamlining,
expected to be completed by the end of summer 2009, will consolidate production
through nine plant closures in five countries in the
“We are making significant
progress in expanding our supply chain production capability in
By the end of 2008, Hanesbrands
is expected to substantially close seven plants – a sewing plant in El
Salvador, affecting 2,600 employees; a sewing plant in Honduras, affecting
1,250 employees; a sewing plant in Costa Rica, affecting 1,250 employees; and two
yarn plants, a knit-fabric textile plant and an inventory storage warehouse in
the United States, affecting 745 employees.
By the end of summer 2009,
the company expects to also close a sewing plant in
Hanesbrands Inc. Announces Latest Progress in
Supply Chain Strategy to Balance Global Production and Further Improve Cost
Competitiveness – Page 2
Hanesbrands expects to incur
restructuring and related charges for these nine plant actions, including
severance and contract termination costs, accelerated depreciation of fixed
assets and inventory write-offs, totaling approximately $76 million, of which
approximately two-thirds are expected to be incurred in the third quarter of
2008. With these charges, Hanesbrands
will have taken approximately $204 million out of the $250 million in
restructuring charges the company has said it expects to incur in the three
years following the spinoff.
“In addition to improving
cost competitiveness, these moves will lay the foundation for completing our
Asia build out and improve the alignment of our sewing operations with our
end-state flow of textiles,” said Gerald Evans, Hanesbrands president, chief
global supply chain officer. “We regret
that employees will be affected by this production streamlining, but our supply
chain globalization is necessary to strengthen our overall company and keep us
competitive around the world.”
The textile production from the latest closings will be
absorbed into existing textile plants in
Most of the sewing production
from the Central American plants that will close will be moved to the company’s
new Asian facilities. Hanesbrands has
opened or acquired four sewing plants in the past two years – two in
“Our startup of supply chain
operations in
The company is also
constructing a textile fabric plant in
2008 Actions by Country
In
In
Hanesbrands Inc. Announces Latest Progress in
Supply Chain Strategy to Balance Global Production and Further Improve Cost
Competitiveness – Page 3
In
In the
The
company will provide severance benefits and career transition assistance to
employees. “We
will work diligently to assist our employees in their transition,” Evans said. “These moves are a result of our strategy to
compete in the global marketplace and are unrelated to the quality of work of our
employees at these facilities. We have an outstanding workforce around the
globe, and the employees at these facilities are very talented.”
2009
Actions by Country
The
following plants are expected to close by the end of summer 2009.
In
In the
Hanesbrands Inc.
Hanesbrands
Inc. is a leading marketer of innerwear, outerwear and hosiery apparel
under strong consumer brands, including Hanes, Champion, Playtex, Bali,
Just My Size, barely there and Wonderbra. The
company designs, manufactures, sources and sells T-shirts, bras, panties, men’s
underwear, children’s underwear, socks, hosiery,
casual wear and active wear. Hanesbrands has approximately 50,000 employees
in more than 25 countries. More
information about Hanesbrands Inc. may be found on the internet at http://www.hanesbrands.com.
Cautionary Statement Concerning Forward-Looking
Statements
Statements in this press release that are
not statements of historical fact are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including those regarding the benefits expected from facility
closures, our long-term goals, and trends associated with our
business. These
forward-looking statements are made only as of
the date of this press release and are based on our current intent, beliefs,
plans and expectations. They involve risks and uncertainties that could cause actual
future results, performance or developments to differ materially from those
described in or implied by such forward-
Hanesbrands Inc. Announces Latest Progress in
Supply Chain Strategy to Balance Global Production and Further Improve Cost
Competitiveness – Page 4
looking
statements. These risks and
uncertainties include the following: our ability to migrate our production and manufacturing operations to lower-cost countries around
the world; our ability to effectively implement other components of our
business strategy; costs and adverse publicity from violations of labor or
environmental laws by us or our suppliers; our ability to successfully manage
adverse changes in social, political, economic, legal and other conditions
affecting our foreign operations; retailer consolidation and other changes in
the apparel essentials industry; our ability to keep pace with changing
consumer preferences; loss of or reduction in sales to, or financial
difficulties experienced by, any of our top customers; fluctuations in the
price or availability of cotton, oil or labor; inflationary pressure on or
general economic conditions affecting consumer demand; our debt and
debt-service requirements that restrict our operating and financial flexibility
and impose interest and financing costs; and other risks identified from time
to time in our most recent Securities and Exchange Commission reports,
including the 2007 Annual Report on Form 10-K, 2008 quarterly reports on Form
10-Q and current reports on Form 8-K, registration statements, press releases
and other communications. The company
undertakes no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
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