Category Archives: Fruit of the Loom

Berkshire Hathaway’s Apparel and Footwear Businesses Have Modest Growth

(BRK.A), (BRK.B)

Berkshire Hathaway’s revenues generated by its apparel and footwear businesses, including Fruit of the Loom, H.H. Brown Shoe Group, Garan, and Brooks Sports, had modest growth in 2017.

Sales increased 1.2 percent in 2017 compared to 2016, to $4.2 billion.

According to Berkshire Hathaway’s 10K filing, pre-tax earnings from apparel and footwear businesses were up 5 percent in 2017, primarily due to increased earnings from the footwear businesses.

Berkshire Hathaway’s footwear business includes Brooks Sports and H.H. Brown Shoe Group, which includes Justin, Tony Lama, Nocona, Chippewa, BØRN, B•Ø•C, Carolina, Söfft, Double-H Boots, Nursemates and Comfortiva. Apparel businesses largely consists of Fruit of the Loom, which includes Fruit of the Loom, Jerzees, Vanity Fair, Russell Athletic and Spalding. Berkshire Hathaway also owns Garan, the children’s apparel brand.

In 2016, apparel and footwear revenues in 2016 declined $81 million (1.9 percent) compared to 2015, reflecting lower footwear sales and the impact of a divestiture by Fruit of the Loom in 2015. Earnings of its apparel businesses increased 22 percent in 2016, primarily attributable to lower restructuring costs and a loss in 2015 from the disposition of a Fruit of the Loom operation, partly offset by lower earnings from its footwear businesses. In 2015, Fruit of the Loom exited an unprofitable intimate apparel business in Europe.

Overall sales in its Consumer Products segment rose 10.0 percent in 2017 to $12.1 billion. Besides the footwear and apparel business, the Consumer Products segments includes Forest River (leisure vehicles), Duracell (batteries), Larson Juhl (custom framing products) and Richline (jewelry).

While employee levels for most of Berkshire’s brands were relatively stable, Russell Athletics had a major decline of 1,020 employees as compared to 1,551 in 2016.

In 2017, Fruit of the Loom’s Russell Athletic brand ceased making athletic uniforms. The move marked the end of a long history in a product line that in the last decade had seen skyrocketing marketing costs.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Fruit of the Loom Partners with Goldbug

(BRK.A), (BRK.B)

Fruit of the Loom has announced a new partnership and licensing agreement with Goldbug, the largest distributor of infant and children’s accessories in the United States.

The new relationship between Fruit of the Loom and Goldbug will produce a unique product line to cover babies’ needs from head to toe, which will sell at national and online retailers beginning in spring 2019.

“As a proven leader in the baby softgoods market, Goldbug’s focus on quality and innovative design makes them the perfect strategic partner for us as we enter this category,” said Melissa Burgess Taylor, Fruit of the Loom, Inc., Chairman and CEO. “Fruit of the Loom is known for its quality, value and style, and we are excited to offer innovative products to new parents seeking a known and trusted brand for their children.”

“We are enormously proud to begin a partnership with Fruit of the Loom, an iconic American brand recognized around the world,” said Katherine Gold, Goldbug CEO. “We look forward to a long and productive relationship with Fruit of the Loom, which will allow us to grow together and develop products that offer solution-oriented, pleasing designs that parents will love.”

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Fruit of the Loom Brand Debuts in India

(BRK.A), (BRK.B)

Fruit of the Loom has hit the retail shelves in India thanks to a licensing agreement with Rupa and Company, the number one knitwear maker in India.

Rupa, which has the capacity to make over 700,000 pieces of knitwear a day, is paying a fixed royalty for the right to manufacture Fruit of the Loom branded products.

“We aim to achieve sales of Rs 500 crore from Fruit of the Loom in next two-three years,” said Ramesh Agarwal, Whole Time Director of Rupa & Co., in an appearance on CNBC-TV18.

Agarwal is hopeful that the Fruit of the Loom brand will enable it to gain a 20 percent share of India’s premium underwear market.

Rupa has received broad recognition for its success in the knitwear industry, including receiving the Best Corporate Brand Award by The Economic Times at ‘The Economic Times Best Corporate Brands Summit 2015’ held in Mumbai.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Russell Athletic Goes Upscale with Designer Line

(BRK.A), (BRK.B)

Berkshire Hathaway’s Russell Athletic has gone upscale with a new clothing line that’s being sold at Barneys New York, and features $225 sweatshirts and $250 hoodies.

Russell Athletic is partnering with Los Angeles designer Tracey Mills, who worked for several celebrity-favorite streetwear labels before launching his Visitor On Earth line in 2016. The name represents Mills’ aim to produce fashion in harmony with the planet. Blending minimalist shapes and earth tones, the collection of T-shirts, hoodies, and pants creates a unisex uniform that defies a time or place.

Mills is well known for his work with Kanye West, co-designing his Yeezy collections.

The Russell x VOE collection is a unisex capsule featuring tracksuits, oversize sweatshirts, T-shirts and socks in washes and proportions that represent the new school take on classic Nineties old school. Prices range from $70 to $600 and most of the line features the Russell “R” logo and a Visitor on Earth Logo. The t-shirts and sweatshirts feature graphic slogans that deliver a message of positivity and empowerment, such as “Peace in the Hood,” “The World Is Yours” and “Shut Down the System.”

The messaging is key for Mills, who grew up in the foster care system in inner city of Los Angeles. He pitched collaboration to Russell, which was incidentally looking for a project that would create a bridge into the fashion/street world, with the goal of creating a collection that would not only offer something

Just last month, Fruit of the Loom’s Russell Athletic brand announced that it will cease making athletic uniforms. The move marks the end of a long history in a product line that in the last decade has seen skyrocketing marketing costs.

The designer Russell x VOE line fits with Russell Athletic’s new focus on the growing athletic and lifestyle apparel market that has athletic wear as a fashion statement apart from the gym.

Sofia Richie, Justin Bieber, and Bella Hadid are some of the celebrities that have been spotted wearing the new clothing line.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Special Report: Russell Athletic Gets Out of the Athletic Uniform Business

(BRK.A), (BRK.B)

In a major move, Fruit of the Loom’s Russell Athletic brand will cease making athletic uniforms. The move marks the end of a long history in a product line that in the last decade has seen skyrocketing marketing costs.

“For over 115 years, Russell Athletic has provided quality apparel for athletes both on and off the field of play,” Scott Greene, Russell Athletic and Activewear Senior Vice-President for Brand Management, said in a statement. “We are proud of our heritage, but to build lasting relationships with a new generation of athletes, we will need to focus our efforts and play to our strengths.

“Today, we will begin to transition away from the team uniform business to allow greater emphasis on the consumer retail market. With this shift, we will continue to offer high quality athletic lifestyle and performance apparel for distribution through multiple retail and wholesale channels, including continued distribution of collegiate licensed products along with non-uniform apparel through the team dealer network.”

The Big Money Business of Uniform Deals

The move by the shoe companies Nike and Adidas to expand their product lines into the team apparel market eroded Russell Athletic’s share of the market. Major universities, including Alabama and Auburn, switched their contracts to the shoe companies, or to brands such as Under Armour.

Georgia Tech, which was one of the last major universities to have a contract with Russell Athletic, announced this summer that it would be changing companies to Adidas.

In the case of Georgia Tech, Russell Athletic signed a ten-year deal in 2008 that had it paying the university $8.4 million to be the exclusive uniform provider for all its teams. It also provided over $1 million a year in uniforms for players, and $100,000 a year in branded apparel per year for coaches and administrators. The company also paid additional money based on incentives tied to conference and national championships.

In exchange, Russell Athletic got a host of marketing opportunities, including signage in stadiums, announcements during games, and coaches participating in promotions.

No End in Sight

As large as those number are, they pale before sponsorships that are truly astronomical. In 2017, the University of Louisville signed a 10-year $160 million sponsorship with extension with Adidas.

In 2016, Business Journal found that the cost of signing a university had increased approximately 33 percent over the past five years, and that Nike, Adidas and Under Armour combined were paying over $300 million a year to university athletic departments.

Russell Athletic’s new strategy is to grow its direct to consumer business.

“Our new business strategy focuses on the growing athletic and lifestyle apparel market and developing products that will open new doors for retail distribution of our iconic brand,” Greene said in his statement. “An example of this will be the introduction of a new heritage-inspired product line available in spring of 2018. The new line will feature carefully crafted fleece, tees and other apparel. We are confident you’ll be seeing Russell Athletic on more and more consumers soon.”

Russell Corporation was acquired by Berkshire Hathaway in 2006 for $600 million and became a division of Fruit of the Loom. Its business had peaked a decade earlier when in 1992 it landed a five-year contract with Major League Baseball as the exclusive provider of uniforms. By 1995, the company was generating $1.25 billion in annual sales, and had 18,000 employees.

For Berkshire, which likes to acquire companies that have a strong moat protecting their market share, the athletic uniform business was increasingly an alligator filled moat with no castle behind it.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Fruit of the Loom Donating 1 Million Piece of Clothing to Hurricane Harvey Victims

(BRK.A), (BRK.B)

Fruit of the Loom has joined the effort to aid the victims of Hurricane Harvey. The Berkshire Hathaway company is donating nearly 1 million pieces clothing.

The clothing helps people that lost their possessions in the hurricane, and is being to shipped to Houston from Fruit of the Loom distribution centers in Montgomery, Alabama, and Palmetto, South Carolina.

Fruit of the Loom has filled two semi-tractor trailers with clothing underwear, t-shirts, sweatshirts and sweatpants.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Fruit of the Loom Focuses on Sustainability

(BRK.A), (BRK.B)

Berkshire Hathaway’s Fruit of the Loom, Inc., has recently joined The Sustainability Consortium (TSC) as part of its ongoing commitment to corporate social and environmental responsibility.

TSC is a global, non-profit organization working to transform the consumer goods industry so that mainstream consumer goods bought each day, like Fruit of the Loom products, are more sustainable.

“Operating in a sustainable manner is extremely important to all of us at Fruit of the Loom,” said Tony Pelaski, Fruit of the Loom executive vice president and chief operating officer. “As a global organization, we have an obligation to constantly evaluate and improve our sustainability practices. Joining TSC will allow us to evolve and expand our current processes to remain a sustainable organization and leader in the apparel category.

Euan Murray, TSC chief executive states, “We are thrilled to welcome Fruit of the Loom to our very active textiles sector, where they will join other TSC members to improve the environmental, social, and economic performance of the textile value chain. Fruit of the Loom’s membership with TSC and leadership in the apparel industry will us help create more sustainable products for a more sustainable planet.”

As part of The Sustainability Consortium, Fruit of the Loom will have access to one of the world’s largest research databases, which translates sustainability science and data into business tools that can be used throughout a product’s supply chain and lifecycle. Other members of TSC include manufacturers, suppliers, services providers, NGOs, civil society organizations, governmental agencies and academics.

“Fruit of the Loom is committed to conducting business in a socially responsible fashion,” said Pelaski. “The tools available to TSC members will be an invaluable asset as we work toward making products that are not only better for consumers, but also better for the environment,” said Pelaski. “We are proud to be a member of TSC and look forward to learning more from this valuable partnership.”

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Fruit of the Loom Teams With Dow Chemical for New Apparel Line

(BRK.A), (BRK.B)

Berkshire Hathaway’s Fruit of the Loom has teamed up with Dow Chemical’s Dow Microbial control, to add protection and moisture wicking properties to its new ‘Dual Defense’ men’s undergarment line.

Odor protection and moisture wicking are the top two performance features that consumers are looking for in underwear, Dow claims.

“When companies like Fruit of the Loom and Dow collaborate to apply breakthrough technology to consumer products, positive outcomes occur,” said Larry Ryan, business president, Dow Energy and Water Solutions. “Not only does the marketplace benefit from these positive outcomes, but so do the companies, which will fuel future collaborations.”
The collection of men’s FRUIT OF THE LOOM® underwear with DUAL DEFENSE™ will be enhanced with INTELLIFRESH™ durable and long-lasting freshness protection from Dow. INTELLIFRESH™, powered by Dow SILVADUR™ antimicrobial technology, utilizes a patented, smart delivery system that enables long-lasting protection by minimizing the growth of odor-causing bacteria on fabric surfaces.

“Fruit of the Loom is listening to our consumers. They want enhanced benefits at a great value. This collection delivers both in products consumers already know, love, and trust,” said Mark Hartman, vice president of marketing for Fruit of the Loom.

FRUIT OF THE LOOM® chose SILVADUR antimicrobial technology because of the durable performance to last through multiple home launderings. Packaging for the FRUIT OF THE LOOM® products with DUAL DEFENSE™ will feature the INTELLIFRESH™ trademark signaling consumers that the products contain reliable and longer lasting built-in odor protection.

“The growing consumer trend for a more hygienic, sustainable lifestyle is increasing the marketplace demand for apparel with ‘smart technologies’ that offer multiple functional benefits,” said Karel Williams, strategic marketing director for Dow Microbial Control. “As an industry leader, Fruit of the Loom has recognized this important trend and responded by enhancing its Fruit of the Loom products with INTELLIFRESH™ built-in odor protection.”

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Fruit of the Loom Chooses New PR Agency

(BRK.A), (BRK.B)

Fruit of the Loom has selected Cohen & Wolfe as its new North America public relations agency. The 160-year-old underwear manufacturer switched from Ketchum.

Cohen & Wolfe has previously done branding for Barclays, ExxonMobil, GlaxoSmithKline, Hennessy, Mandarin Oriental Hotel Group, Mattel, Panasonic and Smucker’s. The company is a subsidiary of WPP, the world’s largest communications services group.

“We were impressed with the Cohn & Wolfe team and their spot-on consumer insights, uniquely creative ideas and enthusiasm for our brand,” Bryse Yonts, manager of brand communications for Fruit of the Loom, said.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Rupa to Bring Fruit of the Loom Brand to India

(BRK.A), (BRK.B)

The Fruit if the Loom brand is coming to India in a deal that will bring extensive royalties to Berkshire Hathaway and little risk.

Rupa and Company, the number one knitwear maker in India, has struck a deal with Berkshire’s Fruit of the Loom to license the brand for India.

Rupa, which has the capacity to make over 700,000 pieces of knitwear a day, will pay a fixed royalty for the right to manufacture Fruit of the Loom branded products.

Siddhant Agarwal, VP-Business Development & Acquisitions at Rupa and Company, told CNBC-TV18 that the company plans to debut the Fruit of the Loom brand in September or October 2017.

Rupa has received broad recognition for its success in the knitwear industry, including receiving the Best Corporate Brand Award by The Economic Times at ‘The Economic Times Best Corporate Brands Summit 2015’ held in Mumbai.

The company’s shares are listed at NSE and BSE.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.