VF Corp. is doubling down on its shoe and outdoor business, spinning off its storied denim brands into an independently traded company.
The Vans owner, which last month reported double-digit first-quarter growth (thanks largely to the sneaker brand’s 35 percent surge), announced on Monday that it will split into two separate entities: VF, which will focus on its more-profitable active and outdoor brands, including Vans, Timberland and The North Face; and a yet-to-be-named company that will house heritage denim brands Wrangler and Lee, as well as the corporation’s outlet operations.
In a statement, the company said the simplified portfolio will free up VF to expand into new categories and invest in its mergers-and-acquisitions strategy. In the past year, it has bought Dickies owner Williamson-Dickie Mfg. Co., Icebreaker and Altra, bolstering its performance and workwear offerings.
VF also announced that it will move its headquarters from Greensboro, N.C., to Denver in 2019. The company was offered $27 million in tax incentives for the move, which CEO Steve Rendle said the company will match with donations to local charities in the area.
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The denim and outlet business will remain in Greensboro, joined by Lee brand, which is headquartered in Merriam, Kan.
The new VF will have annual revenue north of $11 billion, the company said, as well as earnings before interest, taxes, depreciation and amortization of more than $1.5 billion. The yet-to-be-named denim and outlet business is projected to bring in annual revenues of just over $2.5 billion, with Ebitda of more than $450 million. The transaction is expected to be completed by the first quarter of calendar year 2019.
