Professor Mike Lord Says Hanesbrands Promotions Indicate a Desire for Stability

10.5.2011 Article, Faculty News, Retail

Hanesbrands promotes treasurer to CFO job
Reposted from Winston Salem Journal

Hanesbrands Inc. has chosen an internal candidate to fill its No. 2 management position.

The company said Tuesday that it promoted its treasurer, Richard Moss, to chief financial officer, effective immediately. It also made three other management changes, including naming Gerald Evans Jr. and William Nictakis as co-chief operating officers.

Hanesbrands also announced that it will close a Gear For Sports subsidiary plant. It will eliminate 125 jobs in Chillicothe, Mo., by December as it closes a 50,000-square-foot apparel-decorating and screen-printing plant. Production will move to a lower-cost, 170,000-square-foot plant in Reynosa, Mexico.

Moss, 53, takes over as CFO after serving as treasurer since January 2006.

Moss replaces Lee Wyatt, who resigned in May to pursue opportunities working with turnaround or spinoff companies. The company said it interviewed internal and external candidates for the jobs.

Richard Noll, chairman and chief executive of Hanesbrands, said Moss has been "an instrumental member" of the finance team since the company's spinoff from Sara Lee Corp. in September 2006.

"As CFO, he will add significant value to the company based on his finance skills, knowledge of the business and his past experience as CFO of a publicly traded company," Noll said.

As co-chief operating officers, Evans and Nictakis will have joint responsibility for running Hanesbrands' apparel lines, direct-to-consumer business, international business, global supply chain and information-technology functions.

Evans, 52, was serving as president of the company's international businesses and global supply chain. Nictakis, 51, was serving as president of domestic businesses.

Dale Boyles, 50, was named to the new position of operating chief financial officer. Boyles had served as interim chief financial officer, as well as continuing in his roles as controller and chief accounting officer.

Michael Lord, an associate professor of strategy and entrepreneurship at Wake Forest University, said the promotions indicate the desire for stability at Hanesbrands and a continuing focus on execution of strategy.

Jim Duffy, an analyst with Stifel Nicolaus, said Moss' hands-on experience with the spinoff and Hanesbrands' growth "positions him favorably and gives us confidence (he) can successfully transition to the CFO role."

Hanesbrands bought GearCo Inc. in August 2010 for $55 million and the assumption of about $170 million of debt. Gear For Sports, based in Lenexa, Kan., sells licensed logo apparel in college bookstores and embellished licensed apparel under several brand names, including Hanesbrands' Champion label.

Hanesbrands will keep Gear For Sports' apparel embroidery and decoration production facility in Lenexa to handle high-quality graphic apparel orders with short lead times.

The decision to take production offshore should not be a surprise given that Hanesbrands has reduced its domestic workforce by 43 percent to 8,300 since its spinoff. Meanwhile, its international workforce is up 31 percent to 46,500.

The Reynosa plant also will handle other graphic-apparel business for Hanesbrands, which the company began expanding in July with the launch of Hanes Ink.

Peter Tourtellot, managing director of Anderson Bauman Tourtellot Vos & Co., a turnaround-management company, said Hanesbrands' decision is not surprising.

"Labor cost not only relates to wages, but to productivity," Tourtellot said. "Hanesbrands must believe they will have better total productivity in Mexico than in Missouri."