Hanes Reorganizes Business, Goes Tagless with Michael Jordan

Hanes underwear has been serving the public’s undergarment needs since 1901 so it’s been through a few changes over the years. This company has rode through strong economies and plenty of tough ones. Tough is one way to define the company’s first quarter, during which it lost $26.8 million and revenue went down 3 percent.

Now Hanes is about to adapt again and make a number of changes. For one, HanesBrands is pulling out of Europe altogether, thanks to the economic instability and Eurozone crisis. It’s also getting out of the private-label biz in America. Not only that, any men who wear Hanes won’t have to deal with those itchy tags anymore. The North Carolina-based company is going entirely tagless. Who said you couldn’t make a good pair of underwear better?

Hanes’s European division, Imagewear, brought in 8 percent of the company’s sales, which means that there will be a loss in sales of about $60 million in the second half of this year, according to the Burlington (N.C.) Times-News. However, Hanes will rake in about $20 million in the sale of the company to an affiliate of Smartwares B.V., the paper notes.

"With our exit from Europe, we can devote all of our energies to growing our branded portfolio in core geographies in the Americas and Asia," said Chairman and CEO Richard Noll, the paper reports.

Hanes, of course, helped start the whole tagless movement back in 2002 when the two-year-old son of Terri Thompson, is the director of merchandising at Sara Lee Underwear, which makes Hanes, wanted his tag cut out. The two (as the New York Times recounts) squabbled over it at first but mom then brought the idea to Hanes and soon the company was saving dough on the tag elimination and plenty of  consumers happily went without itchiness on their necks.

Now all the men’s underwear is going tagless and Hanes is sinking some dollars into a marketing campaign to let the world know via a new TV campaign featuring basketball legend Michael Jordan, who's been associated with Hanes for 20 years.

“As a brand, our mission is to deliver consumer-driven product innovations for superior comfort with enhanced fit,” said Sidney Falken, chief branding officer, Hanes, in a press release. “Tags continue to be a significant irritant for our consumers, so we sought to address this issue across all of our styles of men’s underwear bottoms. We consider ourselves to be comfort innovators and we strive to deliver both physical and emotional comfort with all of our products.” And all of its business operations, of course.