Hanesbrands buys rival Maidenform

The American apparel retailer Hanesbrands and maker of Wonderbra announced on Tuesday that it plans to buy rival Maidenform Brands Inc. for approximately 547 million dollars to expand its bra business. By acquiring the lingerie and intimate

fashion group, Hanesbrands would add the brands Maidenform, Flexees and Self Expressions to its existing portfolio, which includes brands like Playtex, Bali, Champion, Wonderbra and namesake Hanes. While the board of directors of both companies already approved the acquisition, the approval by Maidenform’s shareholders is still pending.

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industry players unite to optimize strengths

The union of the second (Hanesbrands) and fifth largest (Maidenform) industry players by market share marks one the 11.5 billion-dollar-industry’s biggest developments in recent years. "Maidenform has great brands that consumers trust. Combining the complementary strengths of both companies creates a lot of growth opportunities," commented Hanesbrands' CEO Richard A. Noll.

The move illustrates the challenges that the bra and underwear industry has been facing in recent years: specialized retailers such as Victoria's Secret and innovative new entrants like shapewear company Spanx for example mean serious competition for traditional bra and underwear makers.

Facing industry challenges together

In addition, the recession has made customers more careful in terms of spending: "It used to be women invested in their intimates, now they're investing either in their bra wardrobe or panty wardrobe. The economy changed the way we buy; we're not buying everything all at once anymore," ascertained Marshal Cohen, chief industry analyst at The NPD Group.

For Maidenform, the association with Hanesbrands would mean that the Iselin, NJ-based company could take advantage of Hansebrands’ marketing campaigns while the Winston Salem, NC-based company would benefit from Maidenform’s fresh designs and youthful lines.

“We don't have nearly as strong of a business in shapewear, so we think our ability to tap into their expertise and expand it across our portfolio of brands makes a lot of sense," added Noll. The acquisition is supposed to be closed in the fourth quarter, and Hanesbrands expects earning per share already within the first year of completion. Within three years, it expects earnings of 60 cents per share.

Image: Comfort Devotion Embellished Extra Coverage Bra / Maidenform