On April 7, Hanesbrands (NYSE:HBI) updated investors on steps it is taking amid the COVID-19 pandemic. In a press release, Hanesbrands said it is "limiting discretionary spending, reducing executive pay, managing inventory, leveraging the company's e-commerce business across the online channel, and diversifying production to include face masks."
With about 1,200 brand stores temporarily closed worldwide, Hanesbrands is shifting its focus primarily to the production of FDA-approved all-cotton masks. The company expects to make at least 320 million masks to help stop the spread of the virus, and it has already delivered 10 million.
This comes as cities around the U.S. are mandating the wearing of masks to stop the spread of the virus.
Meeting a critical short-term need
While Hanesbrands is putting its employees first during this crisis, it is also planning for a fast recovery when the pandemic eventually fades away, explained CEO Gerald W. Evans.
The company has reduced capital spending to a "critical-needs basis only." Most of the production operations have also been paused temporarily to focus on making masks, but consumers can still shop the Champion and Hanes brands online.
Hanes has more than $1 billion of cash to meet near-term expenses. Evans pointed to the company's 120-year history of surviving previous recessions and other disruptions as proof that Hanesbrands will survive this crisis.
"We firmly believe that the strength of our brands, the basic nature of our apparel products, and the flexibility of our company-owned global supply chain positions us well to navigate the current environment and take advantage of the return of more normalized demand patterns to generate long-term growth," he said.