…you’re in the outsourcing business! quit acting like a broker…you’re in the outsourcing...

…You’re in the Outsourcing Business!

Quit Acting Like A Broker…You’re in the Outsourcing Business!John EnglertKevin Hughes, SIOR, Colliers Corporate SolutionsKevin Dollhopf, Hanesbrands

October 27, 2006

2006 Fall Professional Conference – Charlotte, NC USA


HbIAmerica’s best known apparel brands


HanesA Category LeaderTotal Apparel Market HbI Categories

Sales Share Sales Share

1 Old Navy $5,806 3.1% 1 Hanes $3,869 7.3%

2 Hanes $4,684 2.5% 2 Victoria's Secret $2,599 4.9%

3 Gap $4,453 2.4% 3 Fruit of the Loom $2,195 4.2%

4 Polo/RL $3,953 2.1% 4 Old Navy $1,578 3.0%

5 Victoria's Secret $3,480 1.8% 5 Nike $1,063 2.0%

6 Levi's $2,901 1.5% 6 Gap $1,027 1.9%

7 Liz Claiborne $2,588 1.4% 7 Adidas $922 1.8%

8 Nike $2,578 1.4% 8 Disney $880 1.7%

9 Fruit of the Loom $2,482 1.3% 9 Abercrombie & Fitch $668 1.3%

10 Abercrombie & Fitch $2,313 1.2% 10 Calvin Klein $543 1.0%

11 Faded Glory $2,167 1.1% 11 American Eagle Outfitters $533 1.0%

Source: NPD Consumer Panel Track, Rolling 12 months ending June 2006


Current Production Facility Locations

United States

C. Am / Caribbean

India

China

145 Facilities17MM SF


Current Distribution FacilitiesC A N A D A

M E X I C O

Legend

Size > 400k Ft2

Size < 100k Ft2

Size between 100k and 400 k Ft2

Choloma

SIOR October 27, 2006

35 Facilities7MM SF


Global Sourcing Regional Hub Locations

Hong Kong

EUROPE

Istanbul

ASIA PACIFIC

AFRICA

S. AMERICA

CANADA

USA

AUSTRALIA

BangaloreLatin America

Shanghai

Winston-Salem


20 Facilities2MM SF



Retail Outlet Locations

250 Facilities1.2MM SF


Organizational ConsolidationPrintables

Sara Lee Underwear

Sara Lee Sock Co.

Sara Lee Casualwear

Champion Products, Inc.

Sara Lee Intimate Apparel

Sara Lee Direct

Sara Lee Hosiery

International

12

3

567

8

49



Functional Excellence

HbI Real Estate Mandate:

Design and execute a real estate functionexpert

in driving corporate strategies through the land, building, and infrastructure

asset base


Organization Chart

CEO

COOCFO

Actg. Fin Legal Adin H/R Sales Mktg.


FIN

HR IT

CREGovt.Affairs

OtherAdmin

Legal

Operating Model


HR IT

CRE

FIN


HR IT

CRE

FINIntegrated Services

Workplace Solutions

Global Business Solutions

Shared Services

Integrated Services

Workplace Solutions

Global Business Solutions

Shared Services


SP

SPSPCRE


“More and more people working in and for organizations will actually be on the payroll of an independent outside contractor. Businesses, hospitals, schools, governments, labor unions – all

kinds of organizations, large and small – are increasingly “unbundling” clerical, maintenance and support work.”

By Peter F. Drucker

“Sell The Mailroom”

The Wall Street Journal

July 25, 1989


Companies are no longer just outsourcing. Today, they are building global corporate ecosystems linking people, processes, and

technologies across the traditional boundaries of the business.

Outsourcing Professionals take the lead in working with senior management to set policy, identify opportunities, execute,

govern, and assure quality results.


Outsourcing is Creating…


Strategy + Execution = Opportunity!

1) Drive growth: category and share

2) Improve cost competitiveness3) Increase reliability and

consistency4) Optimize asset efficiency5) Organize for success


Six Competitive Strengths

- Strong brands and leading market positions- Focus on manufacturing/selling high-volume

core essentials- Significant operating scale- Strong customer relationships- Strong, consistent cash flow- Experienced management team


CRE 2000

IDRC 1996

Corporate Real Estate Function …

• Too tactical, not strategic

• Financial metrics absent

• Minimal cost controls

• Poor alignment with business units


5 Years Later …

• Focus on cost management

• Outsourcing

• Role Confusion

Alignment out of whack!

10 Years Later …

REEB Alignment Survey

POOR!


Strategy

CRMPerformanc

e Manageme

ntAcquisitions /Dispositions

Real Estate: A Business Process-Driven Function


RE Expense: Client’s Value is Space Driven

Space + + Labor

RE Expense = Services

50%-75% 30%-15% 20%-10%

Strategic business insight, improved RE processes andbetter analytics will lead to less and better utilized space

Disciplined sourcing and aggregated buying will lead to increased savings

Collaborative solutions and variable resources will lead to lower fixed staff costs

…You’re in the Outsourcing Business! Value Proposition: Outcome Based Performance

Responsive, Enable Change, Flexibility, and

Commitment To Quality

Speed To Market, Efficient Process, Customer Service

Focus: Move the conversation from a discussion around “Direct Cost “ to a discussion about “Total Enterprise Value” creation.

Focus: Move the conversation from a discussion around “Direct Cost “ to a discussion about “Total Enterprise Value” creation.

Reduce Total Cost of Real Estate,Relentless Execution

1X

10X

.1XDirectCost

DirectCost

BusinessImpact

StrategicImpact


…you are an expert with experiential knowledge of:• Real estate markets• Real estate transactions• Real estate negotiation• Real estate finance and investment theory• Real estate valuation• Real estate contracts• Real estate best in class practices


My Assumption


Top Ten Value Propositions

10) Provide intelligence about my industry, competitors, and company

9) Don’t call if you just read it in the newspaper

8) Be prepared to work with other outsourced providers, and probably your competitors

7) Know and understand the implications of SOX

6) Your company is as dysfunctional as mine: know the operating model, business it does with me, and be honest about capabilities


Top Ten Value Propositions

5) Be an expert, but help me find other expertise

4) Know the boundary of business and legal advice

3) Benchmark and provide metrics, performance indicators

2) Corporate services = real estate staff. Act accordingly and be responsive.

1) Always act with the highest ethical standards

…you’re in the outsourcing business! quit acting like a broker…you’re in the outsourcing...

Documents

outsourcing business

sf slide

cre fin slide

sp cre slide

nc usa slide

fin hrit cre

old navy

abercrombie fitch