VF considers the next play for its sports apparel business
March 25, 2016 01:03 PM
(Bloomberg)—VF Corp., the owner of the North Face, Lee and Wrangler clothing brands, is exploring alternatives for a business that makes licensed athletic apparel amid sluggish consumer demand in the U.S.
“As active portfolio managers, we constantly assess the composition of our company to ensure VF’s portfolio is aligned with our strategic objectives and positioned to maximize growth and return to our shareholders,” Eric Wiseman, VF’s CEO, said.
The Licensed Sports Group business includes the Majestic brand and supplies apparel and fanware through licensing with professional sports teams, colleges and lifestyle brands, the company said. The business produced about $550 million in revenue last year, according to the statement. VF had 2014 web sales of $350 million, according to Top500Guide.com data. Those sales rose 4% from a year earlier, helped by demand for Major League Baseball and National Basketball Association items, VF, No. 104 in the Internet Retailer 2015 Top 500 Guide, said in its annual regulatory report.
VF delivered fourth-quarter sales and profit last month that missed analysts’ estimates, citing a softer consumer environment, record warm weather and the strengthening U.S. dollar. Wiseman said in an interview then that sluggish consumer demand had led VF to re-evaluate what was not working and missing in its business and that the company was likely to reshape its portfolio, including buying or divesting brands.
Retailers, ranging from discounters like Wal-Mart Stores Inc. (No. 3 in the Top 500) to luxury department stores like Nordstrom Inc. (No. 19), have cited similar challenges.
VF hasn’t made a major acquisition since it bought shoe company Timberland for about $2.3 billion in 2011. The Greensboro, N.C.-based company’s last divestiture was in April 2012, when it sold menswear brand John Varvatos Enterprises Inc.