DB Apparel, the Jacobs based underwear manufacturer behind five well-known global brands – Playtex, Wonderbra, Shock Absorber, BEAR and She Bear – has been snapped up by global giant, HanesBrands.
For the local operation, which was created in 1970 and is the only full assortment underwear manufacturer in South Africa that supplies to both the male and female underwear markets, it will be business as usual.
The buyout, for an undisclosed amount, means a name change to Hanes South Africa but little upheaval for the 795 people at its factories which turn out around five million units per annum.
But it is a step up in the world. Its new $6 billion multinational parent is listed on the New York Stock Exchange and has built itself up to be a global leader in the manufacture and marketing of underwear, through an aggressive acquisition strategy.
Today, this mega manufacturer employs more than 53 000 people in over 50 facilities across the world and owns 23 top international brands including Playtex, Wonderbra, Barely There, FILA, Champion and Hanes. These produce over 2.2 billion units per year. With a global supply chain balanced across the East and West, it leverages the advantage of manufacturing in fewer bigger facilities operating at scale. These produce products for markets in 30 countries.
In September 2014, HanesBrands acquired DB Apparel France, the leading intimate apparel and underwear company in Europe. Up until then, its presence in these markets was MINIMAL.
It seems that it has now turned its attention to Africa.
This latest transaction renews optimism that South African apparel companies are worthwhile investments.
Local managing director, Andre van Vuuren, points out that that the weak rand had much to do with DB Apparel’s appeal. It’s not rocket science. The lower rand off sets South Africa’s traditionally high labour costs, making local producers competitive once more.
Currently, most underwear sold in South Africa is imported as completed garments.
Right now, 99% of all garments produced by HanesBrands South Africa are made locally. The company’s exposure to risks associated with currency fluctuations is less than that of its competitors’ as only the raw materials needed to manufacture underwear are imported.
The former DB Apparel may have been one of few apparel manufacturers to ride out the storms of the South African clothing and textile sectors over the past two years, but it has taken its share of blows. It struggled financially for three years before seeing an uptick in 2015. Now, the plan is to double the size of the business by 2020.
Van Vuuren believes there is much to gain from joining the HanesBrands family and its extensive supply chain and network.
He said that there was a strong possibility that the local factory could not only manufacture for the local and broader African markets, but also play a role in HanesBrands’ global business.
Yet, he is confident that the South African operations strength remains its strong local manufacturing base which enables it to stay in touch with its local market and cater to specific styling and sizing requirements as well as local tastes.
Positive changes that are already underway include the upgrading of both machinery and computer systems on the back of a R25 million capital injection from the Industrial Development Corporation. This forms part of a wider government strategy to motive the rebirth of the clothing sector.