Business

VF Plans to Spin Out Its Denim Brands

Denim is out. Athleisure is in. For VF Corp., the apparel company that owns Wrangler and Lee jeans, that made for a simple decision.

Posted Updated

By
Michael J. de la Merced
, New York Times

Denim is out. Athleisure is in. For VF Corp., the apparel company that owns Wrangler and Lee jeans, that made for a simple decision.

VF announced on Monday that it planned to spin out its denim brands into a separate publicly traded business, so it can better focus on its faster-growing activewear and lifestyle clothing lines like The North Face and Vans.

VF has spent much of the past two decades diversifying away from denim through acquisitions, including its $2 billion takeover of Timberland in 2011, and shedding slower-growing businesses. The company sold its Vanity Fair Intimates line of underwear over a decade ago, and more recently has sold off brands like Seven for All Mankind, one of the first premium denim labels, and Nautica.

Still, spinning out the jeans business, particularly two brands with such long histories, is a big step. The company bought Lee in 1969 and Wrangler in 1986, and the division was responsible for $2.7 billion of VF’s $11.8 billion in sales last year.

But as consumers’ preference for activewear has increased in recent years, the denim division’s sales have fallen.

On a conference call with analysts, VF executives said the spinoff would let each business focus on its own strategy.

Shareholders appeared skeptical of the move. Shares in VF were down more than 3 percent as of Monday afternoon to $92.82.

As part of the plan, the new denim company would be based in Greensboro, North Carolina, the home of Wrangler, and VF plans to move to its headquarters to Denver.

Scott Baxter, who oversaw VF’s jeans division from 2011 through 2015, will lead the new denim business.

Shareholders of VF will receive stock in the company through a tax-free spinoff.

Brands Owned by VF:

Altra; Bulwark; Dickies; Eagle Creek; Eastpak; Horace Small; Icebreaker; JanSport; Kipling; Kodiak; Lee; Riders by Lee; Napapijri; Red Kap; Reef; Rock & Republic; SmartWool; Terra; The North Face; Timberland; Vans; Walls; Workrite Uniform Co.; Wrangler.

Copyright 2024 New York Times News Service. All rights reserved.