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Hanesbrands Inc. Says China Currency Fluctuation Policy Will Not Have Material Effect on the Company

^{Published on 2010-06-23 14:11:29 - Market Wire}
 

WINSTON-SALEM, N.C.--([ BUSINESS WIRE ])--Hanesbrands Inc. (NYSE: HBI) said today that Chinaa™s decision to allow fluctuation of the Renminbi/yuan currency value will not have a material effect on company performance and will not alter the companya™s global supply chain advantages, including its East Asia manufacturing hub.

"The competitiveness of our balanced global supply chain is a key pillar to our growth strategy"

Currency fluctuation is just one of many variables the company continually manages around the world, including commodity costs, labor inflation, trade laws, and product sourcing. Last week, China announced that it would reform its Renminbi exchange rate regime and increase exchange rate fluctuation flexibility.

Hanesbrands has little exposure to Renminbi currency fluctuation. For example, a 5 percent exchange rate change for the Renminbi would have just a $1 million to $1.5 million pretax effect on company costs in 2011 and even smaller effect in 2010.

Hanesbrands produces the majority of its products in its own manufacturing plants located primarily in three balanced geographic clusters: the Caribbean Basin, Central America and East Asia. The companya™s East Asia production a" fabric production in China and garment sewing in Thailand and Vietnam a" also gives Hanesbrands a low-cost supply to support its U.S. commercial business as well as its growing Asia commercial businesses, including in China.

Chinese currency fluctuation would have little impact on company products that are supported by its Nanjing, China, textile fabric plant, which uses U.S. yarn and sends fabric to be sewn in Vietnam and Thailand, limiting the labor and variable costs that could be affected by Chinese currency fluctuation.

aThe competitiveness of our balanced global supply chain is a key pillar to our growth strategy,a said Gerald Evans, Hanesbrands president, international business and global supply chain. aBefore deciding in which countries to locate our manufacturing operations in the Caribbean, Central America and Asia, we analyzed extensive long-term scenarios using multiple factors, including currency fluctuation, labor markets, political stability, and energy infrastructure, to name a few. We have one of strongest and most flexible supply chains in the apparel industry that supports our worldwide growth vision.a

While Chinese currency fluctuations are expected to have minimal effect on Hanesbrandsa™ supply chain, other cost pressures are affecting apparel industry supply chains on a worldwide basis, including systemically higher cotton and energy costs and labor inflation. Hanesbrands supplements its production in company-owned plants with sourced goods from strategic vendors located in multiple countries in both hemispheres to assure cost competitiveness. Sourced goods and self-manufactured products from all countries have exposure to systemic cost inflation.

Hanesbrands attempts to mitigate and contain cost spikes through geographic diversity and efficiency initiatives. In light of the systemic cost inflation that is now occurring, Hanesbrands is working in partnership with its customers to implement the optimal mix of price increases and brand investments to allow the company and its customers to successfully navigate this higher cost environment.

Cautionary Statement Concerning Forward-Looking Statements

Statements in press releases, made at investor conferences, or contained in certain other written, electronic and oral communications that are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding our long-term goals and trends associated with our business. These forward-looking statements, if made, are based on current intent, beliefs, plans and expectations, and involve risks and uncertainties that could cause actual future results, performance or developments to differ materially from those described in or implied by such forward-looking statements. The company cautions investors not to place undue reliance on any forward-looking statements and encourages investors to review risk factors contained in the companya™s most recent Securities and Exchange Commission reports, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, registration statements, press releases and other communications. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

About Hanesbrands

Hanesbrands Inc. is a leading marketer of everyday apparel essentials under some of the worlda™s strongest apparel brands, including Hanes, Champion, Playtex, Bali, JMS/Just My Size, barely there and Wonderbra. The company sells T-shirts, bras, panties, mena™s underwear, childrena™s underwear, socks, hosiery, casualwear and activewear produced in the companya™s low-cost global supply chain. Hanesbrands has approximately 45,000 employees in more than 25 countries and takes pride in its strong reputation for ethical business practices. More information about the company and its corporate social responsibility initiatives may be found on the Hanesbrands Internet website at [ www.hanesbrands.com ].