VF Corp. is exploring strategic options for its denim business that could include a sale or spin off of heritage brands Wrangler and Lee, according to the Wall Street Journal.
People familiar with the business have reported that the apparel conglomerate, which also owns Timberland, The North Face and Vans brands, is seeking to shed the denim labels in order to focus on its fast-growing Active and Outdoor segments.
VF’s Jeans segment, which also includes the Rustlers and Rock & Republic brands, has slowed in recent years. In 2017, the denim business had $2.66 billion in sales and $422 million in profit. Since 2015, the segment’s sales have declined 5 percent and profit has dropped 2 percent.
On its most recent earnings call in July, WSJ said VF forecast growth this year for most divisions except jeans, where revenue is expected to be unchanged from last year.
With no imminent signs of a turnaround, as consumers seek out the comfort of athleisure bottoms and key wholesale accounts like Walmart reduce orders in order to sell off excess supply, the move appears agreeable to investors. VF’s shares closed at an all-time high of $95.99 on Thursday. By close of market Friday, shares had reached $96.29.
VF has been working to eliminate underperforming brands from its portfolio. In April, the company sold the Nautica brand to Authentic Brands Group, and last year VF sold its Licensed Sports Group business, including the Majestic brand, to Fanatics.
