“It’s going to be a ‘show me’ type of holiday,” said Hanesbrands chief executive officer Rich Noll at the Morgan Stanley Global Consumer & Retail conference in New York.
He was referring to an analyst’s question about the tough retail environment. Noll acknowledged that they took their sales guidance down, but also said the great thing about Hanes’ business is that it sells across all channels of trade from dollar stores to department stores. He said he expects some retailers to do better than others and that the one trend that every retailer is seeing is the transition to online sales.
Another trend that Noll pointed out was a return to synthetic fibers. He mentioned the movie “Saturday Night Fever,” which he said triggered the end of synthetics and a shift to natural fibers. The new ath-leisure trend has ushered back an acceptance of synthetic fabric.
Noll noted that the company was enjoying some of a tailwind due to cotton prices, but that wage increases cut into those gains. They’ve had to raise prices modestly in order to cover that type of inflation. Usually about 2 percent a year.
In a thinly veiled reference to Wal-Mart’s attempt to renegotiate contracts, Noll talked about relationships with stores saying, “A lot of people talk about, oh, somebody’s talking about they’re starting this initiative or that tactic, they’re trying to improve inventory. They’re working on their terms or whatever, that’s normal part of business. And I don’t see anything today that’s very different than what I’ve seen over the last couple of decades but sticking to our business model, connecting with those consumers giving people great products, at great prices, our business will stay healthy.” Noll noted that it isn’t anything new to the retail environment.
With regards to themes specific to Hanes, Noll said that “fewer, bigger” was the key strategy. Fewer, but bigger brands where they can focus their efforts and resources. Using women’s intimate apparel, Noll said the company would focus on just four brands, Maidenform, Bali, Playtex and Hanes. That way it can make bigger statements.
While the company spends $50 million a year on research and development, it only plans to introduce an innovation every three to four years. Noll said the idea wasn’t to become the flavor of the month.
Hanesbrands is spending more market and advertising dollars in the digital world, which Noll said will be an area for dramatic change over the next five years. He even suggested that in the future a spokesman like Michael Jordan wouldn’t be needed for digital campaigns.