Bonds bounces back thanks to focus on affordable undies

Bonds has found its mojo again after a lengthy period of drooping sales, thanks to its focus on value packs of underwear that have hit the mark with price-conscious shoppers.

Bonds is performing much better after its decision to shift into more affordable packs of garments to cater to more frugal shoppers. Picture: Instagram

Famous Australian underwear brand Bonds has bounced back to growth after a lengthy period of drooping sales thanks to its focus on value packs of underwear that have hit the mark with shoppers amid the cost-of-living crisis.

Addressing US investors for the latest quarterly results of HanesBrands, the North American underwear giant that owns the 110-year-old Bonds brand, chief executive Stephen Bratspies highlighted the difficult trading conditions in Australia characterised by stubbornly high inflation and low economic growth.

He said Bonds – which is part of a wide portfolio of well-known underwear brands such as Berlei, Jockey, Razzamatazz and Playtex – was performing much better after its decision to shift into more affordable packs of garments to cater to more frugal shoppers.

“We found some gaps in the portfolio, at the lower end, that we’ve launched what we call Bonds everyday value product, which is actually a lift (idea) … from the US … that really addressed the price gap we have in the market and that’s doing extremely well. So we feel good about Australia,” Mr Bratspies told analysts.

This focus on value underwear helped return its Australian business back to growth.

“We saw growth in the fourth quarter in Australia of about 4 per cent (and) we have not seen growth in a while there. So I’m encouraged about where that business can go,” Mr Bratspies said.

Bonds hired AFL football champion Dustin Martin to advertise a new range of underwear and appeal to younger shoppers.

The Australian market makes up around two-thirds of HanesBrands’s international business, following its deal to buy Pacific Brands for $1.1bn in 2016 which gave it a large portfolio of brands including Bonds, Berlei and bedding label Sheridan.

However, Mr Bratspies warned the Australian economy was facing significant headwinds.

“Australia is still in a challenging situation,” he said. “Inflation is sticky, and GDP is still a little bit low there, but (we) really like the way that business is being run and where it’s headed.”

Labels such as Bonds have faced tough competition amid the struggling economy from private label underwear as general merchandise retailers such as Kmart, Target and Big W flood their shelves with “cheap and cheerful” clothing, homewares and furnishings that are proving a hit with cost-conscious consumers.

The biggest challenge to established brands has come from Anko, the juggernaut private label product range owned by Kmart and Target. More than 1 billion Anko items are sold each year in Australia. Anko has the No. 1 market share in womens­wear, menswear, children’s wear, home and toys, and is the No. 1 or No. 2 in every category.

The sluggish economy has dragged down on Hanes’s results since at least 2023, when Mr Bratspies warned the Australian economy was facing growing challenges.