Hanes Brands Inc. is an American multinational clothing company and distributor of activewear, casual wear, and underwear for commercial markets. The objective that was set for our group to solve in this case was to evaluate strategic alternatives for the company. The three options available to us were:

• Make a strategic acquisition to bolster the company’s long-term competitive market positioning or product selection.

• Find a potential strategic or financial acquirer willing to pay a premium for part or whole of the business.

• Continue on the current path.

My group and I, who chose the name “Herman B Wells Fargo” as a tribute to Herman B Wells, an important figure at Indiana University, and also Wells Fargo, a well-known financial services company, chose to continue on the current path the company was taking.

The reason for this choice was that we reviewed the company’s financials and continuing on their current path was the best option available. The company has accumulated a significant amount of debt over the past few years due to several past acquisitions and the large amount of inventory that the company has on hand. This debt has increased its interest expenses heavily. We determined that going with the first path of another acquisition would put the company under more debt and higher risk which could hurt the company’s stock price and net income. Also, the second option of finding a potential strategic partner or financial acquirer was not feasible since in its current situation the company is not attractive for others to acquire.

I personally feel like I learned the most out of this case. I was in my second year and still early in my studies as most classes up until this point were more general business topics rather than learning skills that we used here. Working within this group has taught me a lot about financial analysis and making decisions through this process. To come to this conclusion we worked together to form an investment thesis and look into industry dynamics, and the company as a whole, and also created models such as a football field analysis, discounted cash flow, comparable companies analysis, precedent transactions analysis, and more. We used these to form a strategic recommendation that aligned with the needs of the company which was data-driven/backed.