Apparel and footwear maker V.F. Corp., owner of brands such as The North Face and Timberland, on Aug. 13 announced a plan to split into two independent publicly traded companies in a bid to sharpen its focus in a rapidly changing consumer environment.
In a statement, V.F. said it will create a new company containing its jeans brands and outlet businesses. V.F.'s jeans brands include labels such as Lee and Wrangler.
V.F. will retain the company's apparel and footwear businesses, which include performance clothing brand Icebreaker and Vans sports lifestyle shoes.
The new company, which is yet to be named, will be created through a tax-free spinoff to V.F. shareholders. The separation is expected to be completed in the first half of 2019, subject to board and regulatory approvals and tax and legal considerations.
"In alignment with our strategic plan, the decision to separate these businesses will allow V.F. to sharpen its focus as a consumer-centric and retail-minded organization anchored in activity-based lifestyle brands," Chairman, President and CEO Steve Rendle was quoted as saying.
The company said it had intensified its focus on activity-based outdoor, active and work lifestyles through a transformation of its portfolio, which has included the acquisitions of Williamson-Dickie and the Icebreaker and Altra brands, and the divestitures of the Nautica brand and its licensed sports group.
"The strategic priorities and financial characteristics of V.F. and [the yet-to-be-named entity] have evolved over time and the synergies across these businesses have become less clear," the company said. "Enabling the jeans business to operate independently from V.F. will allow it to focus on its long-term strategic priorities and achieve even greater potential as a separate company with a separate management team."
The remaining V.F. business, which will have estimated annual revenue of $11 billion, will move its headquarters from Greensboro, N.C., to the metro Denver area, which will also serve as the home for brands such as The North Face, JanSport and Eagle Creek, and V.F.'s global innovation center for technical fabrics and digital lab.
"Locating these brands, along with select V.F. leaders, at the base of the Rocky Mountains will enable us to accelerate innovation, unlock collaboration across brands and functions, attract and retain talent and connect with consumers," Rendle said.
The new company, with estimated annual revenue of $2.5 billion, plans to further extend its geographic footprint with a sharp focus on Asia, building on its established presence in China, V.F. said.
V.F. named Scott Baxter as designated CEO of the new company and Rustin Welton as CFO. Baxter, who joined V.F. in 2007, is group president for the Americas West region and previously was president of the jeanswear business, according to the company's website.
The new company will be based in Greensboro.