VF Corp owner of Lee and Wrangler jeans, plans to spin off it’s denim business in a bid to sharpen it’s focus on faster growing outerwear and activewear brands. VF has declared it wants to create the yet unnamed company through a tax – free spin off for it’s shareholders. The newly formed company would hold VF’s jeans business which includes apparel brands Wrangler, Lee, Rustler and Rock & Republic, and it’s 80 VF retail outlets. These businesses generate about $US 2.5 Billion in annual revenue.
The company acquired Lee, its first denim brand in 1969. It added Wrangler, Rustler and JanSport to it’s portfolio through it’s Blue Bell holding in 1986. The Wall Street Journal reported last week that VF was exploring strategic options for it’s denim business. On Monday of this week shares of VF fell 3.6 percent from Friday’s record close to $US92.82.
The apparel conglomerate has moved in recent years to shed some of it’s classic American brands in it’s portfolio. In the past few years, the company has sold denim brand Seven For All Mankind, the apparel brand Nautica and diverted from it’s stake in the Majestic brand, the official supplier of Major League Baseball Uniforms in the USA.
VF said the moves would allow the company to focus on it’s active and outdoor brands like The North Face, JanSport and Eagle Creek, VF, which also owns Vans, Timberland and Dickies, estimates the core company will generate more than $US 11 Billion in annual revenue.