English
Français
Deutsch
Italiano
Português
Русский
Español
简体中文
हिन्दी
日本語
Hanes and Playtex parent Hanesbrands is facing off with Barington Capital, which had campaigned to separate L Brands into Victoria’s Secret and Bath & Body Works.
Tannen Maury/Bloomberg News
It’s easy to see why an activist would go after
Hanesbrands
—but getting their may prove to be trickier.
Hanesbrands’ (ticker: HBI) portfolio—which includes brands Hanes, Maidenform, and Playtex—include the underpinnings of many wardrobes, but Wall Street has dressed down its stock. Shares now sport a 12% drop for the year to date. A FactSet survey shows that only one of nine analysts who cover the company is bullish on the stock, and the average price target is $4.57, about 18% lower than recent trading levels.
Enter Barington Capital, an activist fund that previously waged a campaign to make the former L Brands separate into
Victoria’s Secret
(VSCO) and
Bath & Body Works
(BBWI). Barington’s list of demands includes a new Hanesbrands CEO, changes to the board, a reduction in inventories, and $300 million in cost cuts to help pay down debts.
In a statement this week, Hanesbrands said it was “open-minded with regard to additional paths to improve performance and create value,” but it declined to discuss Barington in greater detail on an analyst call Thursday.
Some observers are cool to some of Barington’s demands. Hanesbrands CEO Stephen Bratspies joined the company in 2020 and inherited the company’s debt burden, removing some of his culpability, Wedbush Securities analyst Tom Nikic wrote in a research report. Nikic reiterated his Neutral rating on Hanesbrands stock with a $5.50 price target. Cutting costs makes sense, but too much would “run the risk of weakening the infrastructure of the company,” he wrote.
Write to Carleton English at [email protected]
Read the full article here