On an analyst conference call on Wednesday, August 13, Glenn Chamandy, Gildan Activewear’s president and CEO, told the call participants that Gildan’s proposed acquisition of HanesBrands promises to offer at least $200 million in cost synergies over the next three years, but he said the biggest growth opportunity is expanding the 125-year-old Hanes brand in activewear, a category where Gildan excels..

He also expects Hanes’ team to help Gildan’s owned brands, which include Gildan, American Apparel, Comfort Colors, Goldtoe, and Peds, expand at the retail level.

“We’ll be bringing together Gildan’s leadership in activewear with Hanes leading innerwear retail presence and expertise,” said Chamandy. “The combination will enhance our go-to-market capabilities and our continued growth in all channels. It will accelerate Gildan’s retail presence with its portfolio of brands, while supporting the growth of the Hanes brand in activewear in all retail channels.”

Montreal-based Gildan agreed to buy HanesBrands for $2.2 billion in stock and cash, for an enterprise value, including debt of approximately $4.4 billion. The transaction is expected to close in late 2025 or early 2026.

Based on the August 11 closing price for Gildan and HanesBrands shares, the offer implies a value of $6 for HanesBrands shares, representing an implied premium of approximately 24 percent to HanesBrands closing price.

The Financial Times on Monday, August 11 reported that a deal between Gildan and HanesBrands was imminent, causing HanesBrands’ shares to jump. On Wednesday, HBI shares closed at $6.41, up 23 cents, or 3.7 percent.

Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of Gildan and HanesBrands, HBI shareholders will receive 0.102 common shares of Gildan and 80 cents in cash for each share of HanesBrands common stock.

Chamandy told analysts the deal effectively doubles Gildan’s revenues to about $6.9 billion on a prior 12-month pro-forma basis and further enhances Gildan’s “industry-leading” margins.

“Our expanded scale will enhance Gildan’s position in basic apparel as one of the largest global apparel players by number of units sold with strong innovation from yarn, spinning to end product and great supply chain capabilities to support customers,” he said.

He said the combination of will result in “meaningful, balanced category and channel exposure” with Gildan being the dominant player on the wholesale side of the basics business, including sales to wholesale distributors and screen printers, while HanesBrands has a significant presence in basics at retail. Chamandy said, “Gildan’s product offering and diversification will be enhanced with the addition of Hanes’ iconic innerwear brands, broadening our consumer reach and further reducing our reliance on seasonal and cyclical variations.”

On the cost side, Chamandy expects the combined global supply chain will drive manufacturing synergies to enhance Gildan’s further drive down production costs. He said, “Gildan will use its best-in-class, low-cost manufacturing structure and operational expertise to efficiently relocate production volumes across geographies and to optimize its network of distribution logistics infrastructure by leaning on proven operational capabilities.”

He also stressed the two businesses are highly complementary to one another, including selling similar categories but also production for both largely coming out of Central America and the Caribbean, as well as some in Asia.

“The core Haynes business – underwear, socks, t-shirts – is everything that we do,” noted Chamandy. “Our manufacturing footprint is identical. If you walk into a Hanes plant, it may not be as efficient and modernized as Gildan manufacturing is today, but they’re running the exact same processes with exact same types of equipment. So this is a really complementary acquisition from all aspects …Now we can leverage its iconic brands in a much simpler downsized business that will be more manageable for Gildan and Hanes collectively to operate.”

Finally, the transaction is expected to be immediately accretive to Gildan’s adjusted diluted EPS in year one and is expected to be 20 percent accretive to adjusted EPS on a pro-forma basis for expected annual run rate synergies of $200 million. Synergies are expected to reach $50 million in 2026, $100 million in 2027 and $50 million in 2028.

Gildan reaffirmed its full-year 2025 revenue and EPS guidance provided on its recent release of second-quarter results and also provided a three-year outlook for the 2026-2028 period, assuming the merger is completed later this year of in early 2026.

The guidance calls for:

  • Net sales growth at a compound annual growth rate in the 3-5 percent range;
  • Capex as a percentage of sales of about 3-4 percent per year, on average, to support long-term growth and vertical integration;
  • Enhanced shareholder returns through dividends and share repurchases in line with a long-term target leverage framework of 1.5x to 2.5x net debt1 to adjusted EBITDA
  • Adjusted EPS is expected to grow at a compound annual growth rate in the low 20 percent range as compared to the midpoint of Gildan 2025 adjusted diluted EPS guidance of $3.40 to $3.56. Adjusted EPS is expected to “meaningfully exceed” the low 20 percent range in the first year.

Still, Gildan expects only low-single digit growth over the next few years from HanesBrands, which has been seeing declining sales in recent years as it has undergone transformation efforts to drive efficiencies.

HanesBrands in the second quarter raised its outlook for the year after reporting revenue and profits exceeded expectations for the third consecutive quarter.

Steve Bratspies, CEO of HanesBrands, said on the call that sales have stabilized with the company’s core basics business, led by the Hanes brand, now running up low-single digits.

“We’re very excited that we stabilized that business,” said Bratspies. “The Hanes brand is incredibly powerful and continues to resonate with consumers. We continue to gain space at retail so we’re very solid in our basics business and feel good about that.”

The overall 3 percent to 5 percent growth range for sales over the 2026-2028 period will be driven by mid-single-digit gains coming from the existing Gildan business.

Chamandy said Gildan’s own “strategy is not changing” with the company still expecting to take share on the wholesale side of the basics business with the benefit of its low-cost offerings.

“Gildan is a leader in activewear,” said Chamandy. “We’re leveraging our manufacturing platform really to focus on the wholesale market and leveraging innovation and our cost structure to continue taking market share within the  distributor market, the national accounts and supporting retailer private label programs as well as our GLB [global lifestyle brands] businesses.”

Chamandy said that in order to reach the upper end of the 3-5 percent growth range or surpass it, Gildan will likely need to drive growth from activewear at retail and he sees strong potential for the Hanes brand.

“They’re really an innerwear brand, and they really don’t have an activewear presence at retail today,” said Chamandy. He noted that only 10 percent of Hanes’ revenues now come from activewear and about half of that is sold in the printwear channel.

“So very little retail presence for the Hanes brand in activewear,” said Chamandy. “We think we can unlock that value.”

Hanes has recently been seeing a pickup in growth in activewear with sales ahead 30 percent in the second quarter. The uptick comes as HanesBrands last year sold Champion, the biggest brand in its former Activewear segment, to Authentic Brands Group. The sale also included Champion’s college apparel business , including Gear for Sports, Knights Apparel and Champion Teamwear. Hanes last December launched a new “Hanes Moves” collection in an attempt to revive its activewear business.

Chamandy said that while Hanes’ push into activewear is expected to be helped by Gildan’s expertise in activewear and its low-cost infrastructure, Hanes’ strong brand recognition and reputation is also expected to be a major asset in establishing Hanes in the activewear space.

Chamandy admitted that one of the reasons Gildan hasn’t been as successful as HanesBrands with its pushes into retail is because the driving factor of success at retail is led by brand, followed by aspects such as innovation, quality, scale, availability and price.

At wholesale, which he said is “really our core business at Gildan today,” price is most important, followed by factors such as availability, innovation, quality, with brand less important.

“So, in wholesale, we’re able to gain market share by leveraging our low-cost manufacturing,” said Chamandy. “If you look at the last 24 months at how much share we’ve gained, it’s because we have a significant advantage relative to our competitors. In retail, it’s a little bit different. Brand is more relevant. And Hanes has a very, very strong brand.”

Chamandy noted that Hanes’ strong brand recognition is supported by “hundreds of millions” that have been spent in marketing over the years, with campaigns led by Michael Jordan, Tina Turner, and Mike Ditka.

He noted the strength of Hanes’ brand is already evident in other categories where Gildan competes with Hanes. In the underwear category, the Hanes brand “is still gaining market share” while Gildan has found success at retail by focusing on a private label strategy and taking share from third-tier brands.

“The combination at retail really works well because Hanes has got a positioning that we really can’t leverage, basically because of their brand strength and Gildan basically is really focused on the private label and those third-tier brands. So together, we can now tackle the whole market and really operate synergies together.”

Chamandy also expects Hanes’ marketing team will help with not only Hanes’ bigger push into activewear but also exploring opportunities for Gildan’s owned brands within retail channels. As part of the merger, the combined company will maintain a strong presence in Winston-Salem, NC, where HanesBrands is based, while Gildan’s headquarters will continue to be located in Montréal.

He said, “We’re going to leverage the core competency of Hanes’ sales and marketing team in Winston Salem, which will be a continued focus for the company and give us additional manpower and expertise that we may not have as well.”

As part of the merger, Gildan intends to initiate a review of strategic alternatives for HanesBrands Australia, which could include a sale or other transaction. The Gildan CEO said the company feels there’s fewer synergies in combining with the Australia operation because the business outsources the majority of its product.

“It’s not a manufacturing model like the traditional Hanes underwear and innerwear business,” he explained. “So that’s one of the reasons why we’re looking to divest it, because we really don’t have a lot of synergies that will be applied to that business.”

Chamandy, who survived a failed ouster attempt early last year by some former Gildan Board of Directors members to install their own CEO, must feel vindicated with this deal – and the share growth the company is experiencing since that event consumed the entire company, Wall Street and many customers in the marketplace as it played out in a far too public manner.

Photo courtesy HanesBrands