Pacific Brands

Pacific Brands

Type	Public
Traded as	ASX: PBG NZX: PBG S&P/ASX 200 component
Founded	1985, listed on ASX and NSX in 2004[1]
Headquarters	Richmond, Melbourne, Victoria, Australia
Key people	Peter Bush Chairman, John Pollaers CEO
Revenue	AUD 1,270 million (2013) AUD 1,320 million (2012)
Net income	AUD 73.8 million (2013) AUD –450 million (2012)
Number of employees	5000
Subsidiaries	Key brands include Bonds, Sheridan, Sleepmaker, Hard Yakka, Berlei, Clarks, Dunlop Flooring, Dunlop Foams, Dunlopillo, Everlast, Fairydown, Grosby, Holeproof, Hush Puppies, Jockey, Julius Marlow, KingGee, Mossimo, Razzamatazz, Stubbies, Tontine, Volley and Voodoo.
Website	pacificbrands.com.au

Pacific Brands is an Australian clothing, footwear and home textiles company. Its brands include Bonds, Sheridan, Hard Yakka, Berlei, (Clarks), Dunlop Flooring, Dunlopillo, Everlast, Fairydown, Grosby, Holeproof, Hush Puppies, Jockey, Julius Marlow, KingGee, Mossimo, Razzamatazz, Stubbies, Superdry, Tontine, Volley and Voodoo.^[2]

History

The company's origins go back to 1893, when Ireland's Dunlop Pneumatic Tyre Company opened a branch office and factory in Melbourne.^[3] The branch was sold in 1899 and became a separate company, Dunlop Pneumatic Tyre Company of Australasia Ltd, independent of the original Dunlop company. After several name changes, the Australian company became Pacific Dunlop.^[4]

Pacific Brands was formed as a division of the Australian company Pacific Dunlop in 1985. In 2001, Pacific Dunlop sold the division to CVC Asia Pacific and Catalyst Investment Managers, who in 2004 floated the company on the Australian Stock Exchange.^[5] The company's stock forms part of the ASX 200 index.

Time line

• 1893 – Manufactures Dunlop Bicycle tyres.^[6]
• 1915 Bonds founded by George Alan Bond.^[7]
• 1920 – Bonds start producing the Men's Athletic Singlet, also referred to as the Chesty Bond.^[8]
• 1929 – Commences manufacturing of footwear with rubber boots.
• 1937 – Enters sporting goods market with the acquisition of Empire Racket Company.^[9]
• 1960 Produces Sleepmaker inner spring mattresses.
• 1969 Enters underwear and socks market with the acquisition of Holeproof.
• 1971 – Created branded footwear business with the acquisition of Grosby.
• 1982 Acquisition of Paul Winestock's business, which acted as the catalyst for the company's movement into footwear importing.^[10]
• 1985 Formation of Pacific Brands as a division of Pacific Dunlop.^[11]
• 1987 Acquires Bonds.^[12]
• 1994 – First Sheridan Boutique stores opened in Double Bay and St Ives.
• 1995 – Enters outerwear market with the purchase of Boydex International Pty Ltd.
• 1997 – Establishes wholly owned bra manufacturing factory in Indonesia, through the formation of PT Berlei Indonesia.
• 2000 Develops branded footwear business with the acquisition of Clarks (children) and Hush Puppies licences.^[13]
• 2000 – Paul Moore appointed CEO of the business, and a Board of Directors established under the Chairmanship of former Westpac banker Pat Handley.^[14]
• 2001 Pacific Brands was spun off from Pacific Dunlop and sold to CVC Asia Pacific and Catalyst Investment Managers.^[15]
• March 2001, further develops with the acquisition of Sara Lee Apparel Australia Business (including King Gee, Playtex, Razzamatazz and Stubbies).^[16]
• 2002 – PT Berlei becomes WRAP (Worldwide Responsible Accredited Production) certified.^[17]
• 2003 Acquisition of Kolotex hosiery^[18] and Sachi women's footwear.^[19]
• 2004 Listing on the Australian Stock Exchange and New Zealand Stock Exchange.^[20]
• Merrell Footwear distribution licence obtained.^[21]
• Sheridan starts expanding Boutique network.
• 2005 Secures distribution rights for Esprit bedding accessories.
• Acquisitions of Sheridan business including Actil and Arthur Ellis (Homewares New Zealand and Everwarm Survival businesses).^[22]
• 2006 Acquisitions of Peri and Foam Products Australia (FPA).^[23]
• 2007 – Acquired the streetwear division of Globe International (brands include Mooks, Mossimo, Paul Frank, Superdry and Stussy).^[24]
• 2007 – Acquired the Yakka group of companies (including the Yakka, Hard Yakka, Can't Tear 'Em, Stylecorp, NNT Uniforms, Wrangler and Lee Jeans brands) from the Laidlaw family.^[25]
• CEO Paul Moore announces retirement, followed three months later by the retirement of Chairman Pat Handley. James McKenzie appointed Chairman.^[26] Pacific Brands Group General Manager of Underwear and Hosiery Sue Morphet announced as successor to Moore,^[27] effective 1 January 2008.
• Berlei launched the Barely There bra in 2008.
• In 2008, the company signed up to the Ethical Trading Initiative (ETI). Pacific Brands is the founding Australian company to join the ETI - a tripartite organisation involving companies, unions and NGOs. The Code is widely acknowledged as a model code of labour practice, and is derived from the Conventions of the International Labour Organisation (ILO).^[28]
• In 2009, the Ethical Trading Initiative rated the company as Beginner.
• In 2009, in dealing with the GFC, the company unveiled its new strategy which would see it exit the majority of its local manufacturing and focus on competitive sourcing alternatives offshore. Announced it will lay off 1,850 staff and close most manufacturing sites in Australia, saying they are no longer economically viable.^[29] As part of this transformation, the company undertook a capital raising and debt refinancing, raising $165m and refinancing its debt across a range of banks.^[30] The company had received $17.6M in government funding over the previous two years as part of the Textile, Clothing and Footwear Strategic Investment Program designed to improve the TCF industry, improve international competitiveness and assist the industry in adjusting to the lower tariff environment.^[31][32]
• In 2009, Pacific Brands donated in excess of AU $500,000 worth of product to the Salvation Army and in excess of AU $50,000 cash to The Red Cross to assist in dealing with the bushfire crises in Australia at that time. Its staff also volunteered time to assist in the response effort.
• In 2010 the Ethical Trading Initiative increased the company’s rating from Beginner to Improver.
• During 2010, Pacific Brands sold its Chinese Grosby shoe factory, signaling a complete exit from footwear manufacturing. As part of the same deal, it sold its UK footwear business.
• Tontine – Pacific Brands pillow business – introduced a date-stamped pillow in 2010, and suggested that Australians should change their pillows every two years. Research conducted by the brand found that a pillow could grow a complex ecosystem made up of dead skin cells and the things that feed on them. The research also showed there was an average of 9 pillows in every Australian home, with the average age of the oldest pillow being 5.7 years.^[33]
• In 2010, it relinquished licence for Merrell footwear.^[34] Saban acquires Paul Frank Industries and licence.
• 2011 Sleepmaker and Dunlop Foams sold to New Zealand company Sleepyhead and the company sold its Leisure and Fitness business (including Malvern Star Bicycles) to New Zealand's Sheppard Group.^[35]
• During 2011, Pacific Brands acquired the Brands United business from Gazal, which comprised 13 underwear and hosiery retail outlets.^[36]
• July 2011 www.sheridan.com.au is launched.
• November 2011 www.bonds.com.au launched.^[37]
• In 2011, the Ethical Trading Initiative increased the company’s rating from Improver to Achiever.
• In 2012, Volley was the official "dress" shoe of the Australian Olympic Team, who wore a specially designed shoe as part of their uniform during the Opening and Closing ceremonies at the London Olympics. A limited number of the shoes were offered for sale to the public through Big W outlets.^[38]
• In May 2012, BONDS opened its first retail store.^[39]
• In May 2012, Peter Bush announced as new Chairman of Pacific Brands.^[40]
• August 2012 John Pollaers was appointed new Chief Executive Officer (CEO) of Pacific Brands.^[41]
• December 2012 BONDS opens its first outlet store.
• 2012 PT Berlei Indonesia changed name to Pacific Brands Indonesia as it starts to broaden its underwear-manufacturing base.
• September 2013 BONDS opens its first kid's store.^[42]
• December 2013 Pacific Brands acquires UK corporate clothing company, Incorporatewear Ltd.^[43]
• December 2013 Pacific Brands becomes a signatory to the Bangladesh Accord.^[44]
• March 2014 BONDS opens its first international store – in Indonesia. By mid 2014 BONDS to have 25 BONDS store and a further 25 BONDS outlets.^[45]
• April 2014 Superdry opens its flagship store in Emporium, Melbourne.

Appointment of John Pollaers as CEO

Pollaers was appointed for his experience in managing and building brands.^[46]

"Pollaers is an experienced public company CEO, having a distinguished international career spanning 22 years and brings a different skill set, level of leadership experience and energy to the company," Bush commented.^[47]

In 2013, Pollaers unveiled a new blueprint for the company.^[48] The plan outlined a series of strategic imperatives to achieve his vision of focusing on the retail expansions of both Bonds and Sheridan, exploring potential for geographic expansion and maintaining an internationally competitive sourcing and supply chain.^[49]

Operating units

The company has four distinct operating groups covering Pacific Brands Underwear, Sheridan Tontine, Pacific Brands Workwear and Brand Collective (its licensed business).^[50]

The majority of its products are sold through indirect or wholesale channels, supported by the growing direct (via online and owned retail stores) and business to business channels.

Brands

• BONDS^[51]
• Sheridan^[52]
• Hard Yakka^[53]
• Berlei^[54]
• Clarks
• Dunlop Flooring
• Dunlop Foams
• Dunlopillo
• Everlast
• Fairydown
• Grosby
• Holeproof Explorer
• Hush Puppies,
• Jockey,
• Julius Marlow,
• KingGee,
• Mossimo,
• Razzamatazz
• Stubbies
• Superdry
• Tontine
• Volley
• Voodoo

Controversies

Local manufacturing

Pacific Brands have been criticized by union groups for their decision to move manufacturing overseas. In 2009, the board of Pacific Brands announced the sacking of 1,850 employees,^[55] after granting pay rises to executives who developed a plan to move manufacturing operations to China. Union groups protested against the 170% increase in CEO Sue Morphet's pay package.^[56]

Human rights

Pacific Brands’ supplier Li & Fung was criticized by Oxfam in 2009 for having a poor record with regards to transparency and reporting.^[57][58] A key obligation for companies under the Ethical Trading Initiative base code is a living wage provision, which states that companies are obliged to pay enough for workers to meet basic needs and to provide some discretionary income.^[59] Oxfam Australia has urged Pacific Brands to adopt transparent and independent auditing practices, as an initial step towards ensuring respect for the rights workers in their supply chain.^[60]

Executive remuneration

During Morphet's leadership of Pacific Brands, sales had fallen by 15 per cent and net profit by 40 per cent. EPS decreased from 11.5 cents/share to 3.0 cents/share.^[61]

In October 2011, Pacific Brands shareholders voiced their disapproval for its remuneration report. There was a backlash from investors due to Pacific Brands bonuses.^[62] Although shareholders have had the right to vote on remuneration reports since 2005, the results of the shareholder vote were not binding on the board. Under the new rule, a company will be obliged to hold a spill vote of its board if its remuneration report is not supported by 75% or more shareholders for two years in a row.^[63]

Social compliance initiatives

As a founding Australian member in 2008 of the Ethical Trading Initiative (ETI), which is an independent and internationally recognised code of labour practice, founded on the conventions of the International Labour Organisation, annually discloses its ethical sourcing program to the ETI, including continuous improvement initiatives.^[64]

ETI members must adopt their principles of implementation, which set out the approach to ethical trade, including the requirements for companies to demonstrate a clear commitment to integrate ethical trade into their core business practices; to drive ongoing improvements to worker welfare and working conditions, for example through advice and training; and report openly and accurately about their activities.^[65]

Since joining the ETI in 2008, Pacific Brands has demonstrated leadership and yearly improvements which has seen its membership status upgraded from Beginner in 2008, to Improver in 2010 and to Achiever in 2011.

References

External links

• Official website