HanesBrands said on Wednesday it would sell its sportswear brand Champion to Authentic Brands Group in a deal valued at $1.2 billion, as the company looks to streamline business and focus on its innerwear categories.

Shares of HanesBrands surged 15.6 percent in premarket trading.

The deal could reach up to $1.5 billion through an additional contingent cash consideration of up to $300 million based on achievement of performance thresholds.

The acquisition of Champion, known for its athletic tops and hoodies, would help Authentic Brands to foray into the fast-growing sportswear business, as customers increasingly look to fill their wardrobes with casual and athleisure clothing that tends to be more comfortable and stylish.

Authentic Brands holds a wide variety of clothing brands, including Aeropostale, Eddie Bauer, Forever 21 and Ted Baker.

HanesBrands said it intends to focus on extending its innerwear category and increase investments across its portfolio of brands including Hanes, Bonds, Maidenform and Bali.

After the closing of the deal, which is expected to be completed in the second half of 2024, HanesBrands will provide certain transition services for Champion, including operating the business in select regions.

The innerwear maker expects net proceeds from the transaction of about $900 million.

By Ananya Mariam Rajesh; Editing by Shilpi Majumdar

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HanesBrands Considers Sale of Athletic Apparel Maker Champion

HanesBrands is weighing a potential sale of its Champion brand, the company announced Tuesday.

Most days, Genna Metillo spends hunched over a sewing machine in a poorly ventilated factory in an industrial zone about 30 kilometres (18.6 miles) south of Manila, the Philippines, making clothes for international fashion brands.

The pace is punishing under normal circumstances, with high production quotas meaning workers don’t have time to pause, even to go to the bathroom or grab a glass of water. As temperatures soared in April, the situation turned from discomforting to dangerous.

Workers complained of symptoms like headaches, dizziness and nausea. Five people fainted, Metillo said, speaking with translation from Kamz Deligente, the deputy director of the Center for Trade Union and Human Rights in the Philippines.

Such stories are increasingly common, as climate change makes heatwaves around the world more intense, more frequent, longer lasting and deadlier. Asia, where many of fashion’s largest manufacturing hubs are located, is among the regions worst affected.

The fallout is real, growing and largely undocumented, leaving the industry increasingly exposed to a threat it has barely even begun to acknowledge.

It’s Getting Hot in Here

For much of the last two months, parts of South and Southeast Asia steamed under a deadly heat blanket. Though always the hottest time of year, sweltering temperatures, made worse by climate change, dragged on for weeks and broke records across the region.

“I’ve been in Dhaka for five years and I haven’t seen anything like this,” said one factory manager, describing the situation in Bangladesh in April — the country’s hottest on record. “When you get out of vehicles, it’s like a desert.”

Though rains have brought some relief, countries including Cambodia, the Philippines and Myanmar also experienced record-defying heat. In India, where temperatures in Delhi pushed 50 Celsius (122 Fahrenheit) last week, thousands of cases of heat stroke and dozens of deaths have been reported since March, according to local media.

“We’re still in the frame of saying climate and ecological crisis is something that will impact us in the future,” said Liz Parker, an associate member of labour advocacy network Clean Clothes Campaign. “It is having a massive impact now.”

The industry is not prepared to handle the heat.

Most factories are decades old and poorly designed for such sweltering temperatures. Often workers lack access to even basic amenities, like drinking water — something many large brands stipulate their suppliers must provide, but that isn’t always available. Even when it is, many factories limit water or bathroom breaks to no more than once a day in service of production quotas.

Even modern and otherwise well-run factories will struggle to accommodate a world where temperatures above 40 degrees become more common.

During the hottest periods over the last few months, factory water coolers ran out before they could be replenished, air conditioning units overheated and critical equipment stopped working, industry insiders said.

“It’s 40 degrees outside, 42 inside,” the Dhaka factory manager said. “There’s nothing we can do. You cannot air condition; there’s no space, no power, no money. Nobody is going to pay.”

A Quiet, Costly Crisis

Exactly how this year’s high temperatures are affecting the industry is surprisingly difficult to pin down.

Brands and manufacturers don’t systematically monitor and publish data on factory temperatures or their impact on health and safety.

Anecdotally, labour groups say they have received increased reports of maladies associated with high heat and dehydration, like urinary tract infections, heat rashes, dizziness, nausea and diarrhea. The heat also puts more pressure on household incomes, making it harder for those paid by the piece to earn enough to live off and increasing spend on electricity to run fans and buy water and medicine.

But for many workers, the heat is just part of the annual grind — an uncomfortable but temporary backdrop to everyday concerns, chief among them simply making ends meet. Its devastating links to worsening climate change aren’t yet well understood or regularly discussed on the factory floor, said Kalpona Akter, executive director of the Bangladesh Centre for Workers Solidarity.

Even so, rising temperatures might be expected to attract more industry focus because they aren’t just a labour issue; they’re an economic problem, too.

Over the last few months, factories in heat-affected regions experienced increased absenteeism, lower productivity and malfunctioning equipment, industry insiders said. Overworked local grids meant manufacturers in some countries had to rely more on generators to keep production running, a costly (not to mention polluting) measure.

But the threat is still largely being treated as a short-term one that’s managed on an ad hoc basis. The industry is not preparing for a world where temperatures are systemically hotter.

“You have spikes where things get really hot and everyone pays attention to the spike,” said Joe Buckley, Cambodia programme development coordinator at nonprofit labour organisation Solidarity Center. “But things are getting hotter in general. That’s not dramatic … [but] it’s the gradual rise in temperatures that is more alarming.”

Future-proofing the industry for an era of climate extremes will be expensive. Manufacturers, who face intense pricing pressure from brands, extreme competition and market volatility, have little incentive or financial wiggle room to invest in costly factory retrofits.

Still, there are basic, simple measures that can help manage heat. In Pakistan, denim manufacturer Artistic Milliners set up air-conditioned cooling points where workers can take breaks. A handful of factories in Cambodia negotiated heat stress mesasures with local unions, agreeing to turn on cooling systems if temperatures rise above a certain level. Many new factories are being designed to better manage heat by promoting ventilation and natural cooling.

But more broadly, the industry needs to start taking the issue more seriously. Unless it takes steps to adapt to the changing climate, soaring temperatures and flooding in just a handful of manufacturing countries could reduce garment sector export earnings by $65 billion by 2030, prevent the creation of one million jobs and significantly dent operating profits at exposed brands, an analysis by Cornell University’s Global Labor Institute and investment firm Schroders found last year.

“We’ve been doing a lot of work in terms of trying to mitigate climate change, but it’s catching up in our part of the world,” said Nemanthie Kooragamage, group director for sustainable business at Sri Lankan manufacturing giant MAS. “Climate adaptation is as important as climate mitigation now, [but] I’ve never had a conversation about climate adaptation [with the wider industry].”

🇨🇴 Latin American designers descend on Miami Swim Week. Inexmoda, the organiser of Medellin-based Colombiamoda, has partnered with Paraiso to take part in the latest edition of the US-based swimwear showcase, to feature Colombian brands Piel Canela, Champlevé, Be Surreal, Acquerello, Coco Blanco, Bless, Zelma, Rosa Pistacho and Wanitta at the event from May 29 to June 5. “We want to tell the world about our capabilities and what we are for the global fashion industry,” said Sebastián Díez, Inexmoda executive president. “Colombia is becoming one of the most interesting and fastest growing places for fashion and creativity in swimwear and resort wear,” added Natalija Dedic Stojanovic, co-founder and creative director of Paraiso Miami Swim Week. Other Latin American brands joining global companies on the runway included Latal x Moda Peru and Colombian veteran Adriana Fernandez. [FashionNetwork, Fashion United]

🇮🇳 Footwear giant Bata India reports 3% quarterly profit decline. The Gurugram-based company manufacturing and retailing namesake Bata and brands like Power and North Star has posted 63.6 crore rupees ($7.6 million) in net profit against 797.8 crore rupees in revenue, up 2.5 percent year-over-year, for the January-March 2024 period. The India unit is part of Bata Corporation, a Swiss-based multinational group with more than 32,000 employees selling 150 million pairs of shoes annually across 70 countries, manufacturing in 21 factories across 18 countries. Founded in 1894 by Tomas Bata in the Austro-Hungarian Empire (in modern day Czech Republic), the mass market brand has become a household name in emerging markets across Asia, Latin America and Africa. [Economic Times, BoF]

🇦🇪 Most smuggled African gold goes to the United Arab Emirates, claims report. The UAE accounts for 93 percent of undeclared African exports, amounting to tens of billions of dollars, with next two biggest importers being Switzerland and India, according to a recent report by NGO Swissaid. Mali, Zimbabwe and Côte d’Ivoire have the largest volumes of undeclared gold production on the continent and much of the illicit trade linked to money laundering stems from artisanal mining. Dubai, famous for its jewellery souks, is one of the world’s largest gold trading hubs, with 20-40 percent of global stocks passing through the city annually, according to 2021 Global Gold Convention figures. [Financial Times, BoF]

🇺🇬 Uganda’s second-hand clothing sellers are going out of business. The Uganda Dealers in Used Clothing and Shoes Association’s vice chair Lydia Ndagire has said that threats by European countries to restrict the export of mitumba (used clothes) to the East African nation and rising import costs from the US due to the end of the African Growth and Opportunity Act (AGOA) preferential trade agreement over Uganda’s crackdown on homosexuality are driving people out of business. “We are seeing most of our members drop off,” she said. The Owino market alone in the capital Kampala is estimated to provide livelihoods for 100,000 people, mostly women. [Foreign Policy]

🌍 Report highlights African jobs created by used clothing trade. A report covering Angola, Guinea-Bissau, Malawi, Mozambique and Zambia, commissioned by international development network Humana People to People, has concluded that the sector in those five countries is likely to support over 2.5 million people, generating over $73.5 million annually in tax revenues which helps fund essential public services and infrastructure. Challenging reports to the contrary, it also claims that the growth of used clothing imports from the Global North is not a main driver of the decline of local textile manufacturing in those nations. [Kohan Textile Journal, Ecotextile News]

🇮🇳 Indian eyewear retail chain Lenskart raises $200 million in funding. The Gurugram-based company has secured secondary investment from Singapore’s state-owned conglomerate Temasek and Fidelity Management and Research Company, in a round that likely put its valuation at about $5 billion, according to industry sources. Founded in 2010 by Peyush Bansal, Amit Chaudhary and Sumeet Kapahi, Lenskart has over 1,100 stores across India and the Middle East. [Business Standard]

🇨🇳 Swiss watch exports to China fall less sharply in April. Exports to mainland China fell 7.5 percent in April, an improvement on the back of a three-month moving average decline of 20.6 percent, while exports to Hong Kong increased 2 percent, improving from a three-month moving average decline of 22.6 percent. However, overall “Chinese import data shows weakening, with imports of precious metal jewellery and watches both down more than 50 percent year-over-year in April,” according to analysis by Jefferies Research. [BoF]

🇮🇳 Indian activewear firm Techno Sport secures $25 million investment. The Bengaluru-based performance wear and athleisure manufacturer founded by Sunil Jhunjhunwala, Puspen Maity and Sumit Santhalia which trades under the brand name Technosport in the India, South Africa and the UAE markets, has raised the funding from Mumbai-based venture capital firm A91 Partners, founded by former Sequoia Capital India (now Peak XV Partners) partners Abhay Pandey, VT Bharadwaj and Gautam Mago. [Economic Times]

🇨🇳 High-profile Chinese couture client condemns Giambattista Valli. Lu Min, known as Lulu, who has over one million followers across Chinese social media platforms and a space in Shanghai called Maison Lulu that displays her haute couture collection, has accused the Italian brand of lending a sample of the same dress she claimed to have paid a deposit for to British actress Anya Taylor-Joy in Cannes. Her post claiming that the brand broke unspoken industry rules went viral on Xiaohongshu Responding to the claims featured in a report by WWD, a spokesperson for the brand explained that: “without… specification [for exclusivity at the time of order] and the down payment of the exclusivity fee, the piece may be made available to other clients.” [Jing Daily]

🇮🇳 Indian apparel exporter Gokaldas Exports posts 54% Q4 revenue growth. The Bengaluru-based company employing over 32,000 people across twenty production units has reported consolidated revenue of 818 crore rupees ($98 million) in the quarter ended March 2024, compared to 530.1 crore rupees in the same period last year. Managing Director Sivaramakrishnan Ganapathi said, “We overcame pricing pressure, one-time acquisition cost, increased statutory minimum wages and one-time start-up cost at our new unit to deliver a strong EBITDA.” [Economic Times, The Hindu]

🇵🇰 Pakistan’s textile exports decline but yarn and cotton exports increase. The country’s Bureau of Statistics has reported that exports of textile products amounted to $13,683.251 million during the first ten months of the current financial year (July 2023- April 24), down 0.19 percent compared to the same period last year. However, the cotton yarn and raw cotton export segments both increased. [Associated Press of Pakistan]

🇦🇷 Argentine apparel manufacturer Textilcome closes two factories. The Buenos Aires-based company that produces for local and regional brands like Grisino, Cristóbal Colón and Cheeky has shuttered facilities in the provinces of La Rioja and Catamarca, resulting in the dismissal of 267 workers, according to local media DiarioAr. [FashionNetwork]

🇮🇳 India’s WHP Jewellers reportedly secures $10 million investment. The Mumbai-based online gold and diamond retailer founded by Aditya Pethe that sells direct-to-consumer and through third-party platforms Nykaa, Ajio, Amazon, Flipkart and TataCliq has raised the capital in its first funding round from an undisclosed Singapore-based investment firm. [Asian News International, India Retailing]

🇯🇵 Christian Dior appoints Japanese and other athletes as ambassadors. Alongside several athletes from North America and Europe, the French luxury brand has tapped Japanese fencer Misaki Emura, Australian swimmer Emma McKeon and Jamaican sprinter Elaine Thompson-Herah to be part of its brand ambassador “team” for the upcoming Paris Olympic and Paralympic Games. [Ragtrader]

🇮🇳 Traditional Indian fashion retailer Libas raises $18 million in funding. The New Delhi-based womenswear brand founded by Sidhant Keshwani distributed on Flipkart, Myntra and through more than 10 mono-brand stores has secured 150 crore rupees in investment from Mumbai-based private equity firm ICICI Venture. [Economic Times]

🇨🇳 Hong Kong retail sales fall 14.7% in April. According to government data, the decline in the Chinese city’s retail sales was partly due to a fall in visitor spending and a surge in outbound trips during the Easter holidays. April sales fell to HK$29.6 billion ($3.79 billion) following a 7 percent drop in March. [Reuters]

🇮🇳 Indian jeweller Sky Gold sees annual profits double. The Navi Mumbai-based company producing lightweight 18- and 24-carat gold jewellery has posted net profit of 40.5 crore rupees ($4.8 million) in the 2023-2024 fiscal year, compared to 18.6 crore rupees a year earlier. [Economic Times]

🇧🇷 L’Oréal Group names Marina Torres as head of luxury division for Brazil. The French beauty giant has tapped the former general manager of fragrances in the travel retail Americas team to be responsible for managing brands in the division such as Lancôme, Giorgio Armani and Yves Saint Laurent. [FashionNetwork]

🇨🇳 Prada taps Chinese actress and film director Jia Ling as brand ambassador. The Italian luxury brand has appointed the comedic actress and director of films like “Hi Mom” and “Yolo” to appear in its latest local campaign. [China Daily]

🇹🇭 Gucci appoints Thai actor and singer Billkin as brand ambassador. The Italian luxury brand has tapped the star of TV series like “I Promised You the Moon” (whose real name is Putthipong Assaratanakul) for an endorsement deal. [BoF Inbox, L’Officiel Philippines]

🇨🇳 Zhao Guangxun is appointed president of Chinese brand Maia Active. Anta Sports, which acquired the athleisure brand in October, has tapped Zhao, the group’s former vice president of retail operations at Anta, who will report reporting directly to CEO Xu Yang. [Jing Daily]

🇧🇷 Brazilian beauty giant Natura appoints singer Iza as brand ambassador. The company has tapped the Brazilian pop and R&B singer Isabela Cristina Correia de Lima Lima, whose stage name is Iza, to appear in a campaign and endorse selected products. [FashionNetwork]

One of the world’s largest shopping malls is about to get even bigger.

Emaar Properties PJSC announced a 1.5 billion dirham ($408 million) expansion of the iconic Dubai Mall that ties in with the emirate’s efforts to boost its allure for travellers.

The expansion, which includes 240 new luxury retail and dining outlets, will be a “great addition to one of the most visited sites in the world,” the developer’s founder Mohamed Alabbar said in a statement.

Dubai Mall, which sprawls opposite the planet’s tallest skyscraper — Burj Khalifa, welcomed 105 million visitors in 2023, a 19 increase increase year-on-year. The world’s second largest shopping mall currently has over 1,200 stores and 200 food and beverage outlets.

Dubai has long thrived as a gateway for transfer travellers and tourists, but the emirate is shifting its focus to attract more repeat visitors through new visa rules and increased airline capacity.

Dubai International Airport has predicted a record number of passengers for this year, surpassing its busiest inflow seen in 2018. The Middle East’s business hub is also proceeding with building a $35 billion passenger terminal at a second airport, after halting the project for years.

By Kateryna Kadabashy

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Luxury’s New Ramadan Playbook for the Middle East

As luxury marketing hits saturation point in Dubai during the Muslim holy month, global brands are ramping up their local engagement in other Gulf cities including Riyadh, Abu Dhabi and Kuwait City.

Bath & Body Works forecast full-year profit largely below market estimates on Tuesday and said it expects annual sales to drop, signalling demand for its scented candles and body care products would remain subdued amid sticky inflation.

Shares of the Ohio-based beauty and skincare company fell 8.8 percent in premarket trading as it also expects second-quarter profit below estimates.

Customers with constrained budgets are still unwilling to spend on expensive non-essential products such as home goods, while they have begun to open their wallets to smaller discretionary items like trendier clothes and accessories.

Results from big-box retailer Target last month also showed shoppers were delaying their purchases, even as they were spending increasingly on out-of-home activities.

The company now expects 2024 net sales to drop 2.5 percent to flat, compared with its previous forecast of a decline of 3 percent to flat. Analysts were expecting sales to drop 0.37 percent.

It sees full-year adjusted earnings per diluted share to be between $3.05 and $3.35, versus a prior projection of $3.00 and $3.35. Analysts were expecting a profit of $3.31 per share, according to LSEG data.

The forecast comes even as Bath & Body Works has tried to offer promotions, increased its marketing efforts and introduced newer products to drive more customers to its stores.

The company sees adjusted earnings per diluted share between 31 cents and 36 cents for the second quarter, below expectations of 39 cents.

However, it expects second-quarter net sales to range between a decline of 2 percent to flat, with the mid-point above an estimate of a 1.41 percent drop.

Bath & Body Works’ net sales fell 0.9 percent, to $1.38 billion in the quarter ended May 4, compared to expectations of $1.37 billion. Excluding items, it earned 38 cents per share, topping an expectation of 33 cents.

By Granth Vanaik; Editing by Mohammed Safi Shamsi

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Bath & Body Works Projects Downbeat FY Sales, Profit on Slowing Demand

Bath & Body Works forecast annual sales and profit below analysts’ expectations on Thursday as consumers scaled back spending on non-essential items like candles and fragrances, sending its shares down 9 percent in pre-market trading.