Market Overview

VF Corporation Announces Intention to Create Two Independent, Publicly Traded Companies

  • Company Plans Tax-Free Spin-off of Jeans Business to VF Shareholders
  • Separation to Create Enhanced Prospects for Long-Term Value Creation
  • Transaction Expected to be Completed in the First Half of Calendar

VF Corporation (NYSE:VFC), a global leader in branded lifestyle
apparel, footwear and accessories, today announced that its Board of
Directors intends to separate the company into two independent, publicly
traded companies: VF Corporation, a global apparel and footwear
powerhouse, and a yet-to-be named company (NewCo), which will hold VF's
Jeans and VF Outlet businesses and will be a global leader in the denim
category. The company expects to create these companies through a
tax-free spin-off of NewCo to VF's shareholders.

"As shown by our recent quarterly results, VF continues to gain momentum
on our transformation journey, marked by strong progress on our
strategic initiatives and portfolio management," said Steve Rendle,
Chairman, President and Chief Executive Officer. "With these strong
foundations in place, we are now ideally positioned to create two
independent, leading, global companies. In alignment with our strategic
plan, the decision to separate these businesses will allow VF to sharpen
its focus as a consumer-centric and retail-minded organization anchored
in activity-based lifestyle brands. Our Jeans platform is a successful,
sustainable business with iconic global brands and a clear path to value
creation as a standalone entity. This exciting step forward will mean
that both VF and NewCo have the resources, management focus and
financial flexibility to thrive in a dynamic consumer marketplace,
creating an even brighter future for both organizations and all of their

Compelling Strategic Rationale

During the past several years, VF has undertaken a series of
transformational portfolio actions that have driven superior value
creation, including an annualized total shareholder return of more than
17 percent since 2000 – ranking the company in the top 10 percent of S&P
500 Index performers during that period.

In 2017, VF unveiled its five-year growth priorities. These included a
disciplined reshaping of the brand portfolio to better position the
company for long-term success in a quickly changing business landscape.
Since then, VF has pursued a range of opportunities pivotal to its
portfolio transformation, including the acquisitions of
Williamson-Dickie, and the Icebreaker® and Altra® brands,
and the divestitures of the Nautica® brand and the Licensed
Sports Group, including the Majestic® brand. Through these
actions, the company has sharpened its focus on activity-based outdoor,
active and work lifestyles.

As VF continues implementing its 2021 strategic growth plan, its Board
of Directors has consistently explored opportunities to enhance
long-term shareholder value, and believes that separating these
businesses into two, independent, publicly traded companies is the best
path forward. The strategic priorities and financial characteristics of
VF and NewCo have evolved over time and the synergies across these
businesses have become less clear. Enabling the Jeans business to
operate independently from VF 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 company believes the separation will offer several benefits:

  • Both companies will benefit from enhanced strategic and management
  • Each company will benefit from reduced managerial and operational
  • Both companies will be able to optimize their distinct capabilities
    and focus investment on independent growth priorities, positioning
    each for stronger, more sustainable value creation;
  • Each company will have a flexible capital structure with the ability
    to fund targeted profitable growth; and,
  • The operational and financial profile of each company will more
    closely align with its natural investor type.

A More Focused VF

The separation will sharpen VF's focus as a global apparel and footwear
powerhouse with a portfolio of iconic brands in highly attractive and
growing consumer segments and categories, leading to enhanced long-term
revenue growth and margin expansion. With estimated annual revenue of
more than $11 billion, the new VF will have a mid-teen total shareholder
return target, including a strong dividend yield in line with the S&P
500. Building on VF's successful track record of acquiring and
accelerating brand growth, the separation will give the company more
flexibility to pursue its M&A strategy, explore new growth vectors and
apply even more investment behind its organic brand portfolio.

Consistent with its enhanced focus on the outdoor and active consumer,
VF will move its global headquarters to the metro Denver area, which
will also serve as the home for The North Face®, JanSport®,
Smartwool®, Altra®
and Eagle Creek® brands and both VF's
Global Innovation Center for technical fabrics and Digital Lab. The new
Colorado location will be staffed by brand leaders and associates,
innovation staff, certain members of VF's global leadership team and
other corporate functions.

"Locating these brands, along with select VF 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," said Rendle, who will continue to lead VF.

A Global Leader in Denim

NewCo will be a global leader in the denim category, with iconic brands
steeped in rich heritage and authenticity, including the Wrangler®
and Lee® brands. The VF Outlet business will be part of NewCo's

With estimated annual revenue of more than $2.5 billion and a high
single-digit total shareholder return target, NewCo will have an
attractive financial profile, including a sustainable high dividend
yield. NewCo will have a best-in-class supply chain, channel and
category management expertise, reinforced by deep and long-standing
relationships with leading global retailers. Additionally, NewCo will
have diversified geographic exposure and plans to further extend its
geographic footprint with a sharp focus on Asia, building on its
established presence in China. NewCo also will have the opportunity to
expand its distribution to new customers and categories, with a focus on
both their owned and wholesale digital partner channels. NewCo expects
to unlock significant scale and cost efficiencies by streamlining
operations, providing flexibility to pursue strategic acquisitions over

The company also today announced the anticipated designation of Scott
Baxter as Chief Executive Officer of NewCo and Rustin Welton as Chief
Financial Officer, effective upon completion of the transaction.

"Scott is an extremely talented leader who has a long track record of
success, which includes leading the Jeans business from 2011 through
2015, a period during which the business grew at a mid-single-digit
rate," said Rendle. "There's no one more qualified and appropriate to
serve as CEO than Scott. I am confident he will do an exceptional job as
CEO of NewCo."

The company plans to announce additional members of the NewCo executive
team and further details on the composition of the Board of Directors
ahead of the completion of the transaction.

NewCo's global headquarters will be in Greensboro, N.C. The Lee®
brand will move its headquarters to Greensboro from Kansas City, joining
the Wrangler® brand.

Rendle added, "We're proud of our Greensboro, N.C., roots and remain
committed to the community, including a strong ongoing employment
presence. Combined with the relocation of the Lee® brand from
Kansas City and the establishment of a major new public company with
Greensboro headquarters, we expect that total VF and NewCo employment in
the area will remain at current levels."

"This is great news for our associates, who will become part of two more
sharply-focused, dynamic companies, with the ability to build even
stronger partnerships with customers and deliver fantastic innovation
for consumers," he said. "I want to thank all of our outstanding
colleagues for the extraordinary work they have done to get us to this
point. Their talent, passion and hard work will allow both VF and NewCo
to succeed long into the future."

Next Steps

The separation is currently targeted to be completed in the first half
of calendar 2019, subject to final approval by the company's Board of
Directors, customary regulatory approvals and tax and legal
considerations. Throughout the separation process, VF management will
remain committed to business as usual with all key stakeholders,
including customers, employees and local communities.

Investor days will be held for both VF and NewCo during the first half
of calendar 2019.

Barclays is acting as financial advisor to VF Corporation and Davis Polk
and Wardwell LLP is acting as legal advisor.

Webcast, Conference Call and Presentation Materials

VF will host a conference call to discuss the transaction at 8:00 a.m.
Eastern Time today. Webcast registration and presentation materials are
accessible at For those unable to listen to the live
broadcast, an archived version will be available at the same location.
Those interested to participate in the call may dial (877) 407-8129
(domestic) or (201) 493-6710 (international).

Additional information regarding the proposed separation is available at

About VF

VF Corporation (NYSE:VFC) outfits consumers around the world with its
diverse portfolio of iconic lifestyle brands, including Vans®, The North
Face®, Timberland®, Wrangler® and Lee®. Founded in 1899, VF is one of
the world's largest apparel, footwear and accessories companies with
socially and environmentally responsible operations spanning numerous
geographies, product categories and distribution channels. VF is
committed to delivering innovative products to consumers and creating
long-term value for its customers and shareholders. For more
information, visit

Forward-Looking Statements

Certain statements included in this release and attachments are
"forward-looking statements" within the meaning of the federal
securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and
therefore involve several risks and uncertainties. You can identify
these statements by the fact that they use words such as "will,"
"anticipate," "estimate," "expect," "should," "may," "believe,"
"intend," and "plan," and other words and terms of similar meaning or
use of future dates. We caution that forward-looking statements are not
guarantees and that actual results could differ materially from those
expressed or implied in the forward-looking statements. Potential risks
and uncertainties that could cause the actual results of operations or
financial condition of VF to differ materially from those expressed or
implied by forward-looking statements in this release include, but are
not limited to: foreign currency fluctuations; the level of consumer
demand for apparel, footwear and accessories; disruption to VF's
distribution system; VF's reliance on a small number of large customers;
the financial strength of VF's customers; fluctuations in the price,
availability and quality of raw materials and contracted products;
disruption and volatility in the global capital and credit markets; VF's
response to changing fashion trends, evolving consumer preferences and
changing patterns of consumer behavior, intense competition from online
retailers, manufacturing and product innovation; increasing pressure on
margins; VF's ability to implement its business strategy; VF's ability
to grow its international and direct-to-consumer businesses; VF's and
its customers' and vendors' ability to maintain the strength and
security of information technology systems; stability of VF's
manufacturing facilities and foreign suppliers; continued use by VF's
suppliers of ethical business practices; VF's ability to accurately
forecast demand for products; continuity of members of VF's management;
VF's ability to protect trademarks and other intellectual property
rights; possible goodwill and other asset impairment; maintenance by
VF's licensees and distributors of the value of VF's brands; VF's
ability to execute and integrate acquisitions; changes in tax laws and
liabilities; legal, regulatory, political and economic risks; and
adverse or unexpected weather conditions; and risks associated with the
proposed spin-off of our Jeans business and our ability to realize the
expected benefit of the spin-off. More information on potential factors
that could affect VF's financial results is included from time to time
in VF's public reports filed with the Securities and Exchange
Commission, including VF's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. Our forward-looking statements in this release and
attachments speak only as of the date of this release and attachments.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict all
of them. Unless required by law, we undertake no obligation to update
publicly any forward-looking statements as a result of new information,
future events or otherwise. Additional information about the company is
contained in the company's filings with the SEC and is available on VF's

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