Investment by international underwear giant boosts local clothing sector
HanesBrands Inc, the $6 billion global leader in the manufacture and marketing of underwear, has acquired Durban based DB Apparel for an undisclosed amount.
Managing director of DB Apparel, Andre van Vuuren, said the company’s name change to Hanes South Africa would be in effect from this month (February 2016).
He confirmed that the change of ownership and the name change would have no impact on the former DB Apparel’s operations. “We will continue manufacturing and selling high-quality underwear that has built our reputation.”
Becoming part of a massive international group which employs more than 53 000 people across the world and owns 23 top international brands including Playtex, Wonderbra, Barely There, FILA, Champion and Hanes, offered considerable advantages for a proudly South African manufacturer, he explained.
Created in 1970, DB Apparel is the only full assortment underwear manufacturer * in South Africa that supplies to both the male and female underwear markets. The company, which has its head office in Durban, produces around five million units per annum under five well-known global brands – Playtex, Wonderbra, Shock Absorber, BEAR and She Bear.
Despite being rocked by the many challenges facing the South African clothing and textile industry over the past two decades, DB Apparel has continued to grow over the years, adding brands to its portfolio along the way.
Van Vuuren said that the company had experienced an upswing in 2015. Despite challenges such as electricity shortages and the general economic downturn in the country, it is now at a significant advantage as a local manufacturer in light of the depreciation of the rand. The plan is to double the size of the business by 2020.
99 percent of all garments produced by DB Apparel 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. Most underwear produced in South Africa is imported as completed garments.
The advantage of a lower rand off sets South Africa’s traditionally high labour costs, making local producers like DB Apparel more competitive, he said.
Becoming part of HanesBrands, which operates across all continents, opens up significant opportunities for the Durban-based company. Van Vuuren 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 HanesBrand’s global business.
HanesBrands is listed on the New York Stock Exchange. Its global supply chain is balanced across the East and West, leveraging fewer bigger facilities operating at scale and producing products for markets in 30 countries. The group has been on the acquisition trail since 2007 and now owns over 50 facilities across the world. These produce over 2.2 billion units per year.
As one of South Africa’s largest remaining clothing manufacturers, DB Apparel employs 795 people at its factories. Of these, 80 percent are female. Van Vuuren pointed out that, while the company will benefit from incorporation into this large global company, it still enjoyed the benefits that come from a strong local manufacturing base. These include staying in touch with its local market and catering to specific styling and sizing requirements as well as local tastes.
Pointing out that a bra, which is made up of between 35 and 40 different pieces, is an extremely complex product to make, van Vuuren said that the company valued its employees as skills were hard to come by.
The company is committed to training and up skilling its staff and has not only put in place extensive educational facilities for existing employees but also regularly accepts and trains newcomers to the industry doing internships.
Positive changes that are already underway include the upgrading of both machinery and computer systems.
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