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VF steps up search for deals

by Richard Collings  |  Published June 13, 2012 at 5:03 PM
One year after its acquisition of Timberland Co., apparel and footwear conglomerate VF Corp. is back on the hunt for deals and could make an acquisition within the next 12 months, said chief executive Eric Wiseman.

He made the comments after a company presentation at the Piper Jaffray 32nd Annual Consumer Conference, held June 5 and 6 at the Le Parker Meridien hotel in New York.

Greensboro, N.C.-based VF acquired Timberland in June 2011 for $2 billion.

Wiseman declined to comment on potential targets but said VF is looking for acquisitions in the outdoor and active sports lifestyle categories. He said a deal wouldn't be as large as the company's acquisition of Timberland.

Two industry bankers suggested that Cole Haan would be attractive to VF, in addition to a long list of potential rival suitors that would also bid for the footwear and accessories brand.

A private equity source said Cole Haan is a well-known brand with good market share. A banker added that Cole Haan just needs to be "cleaned up a bit," as its marketing is stale and its margins need to be improved.

Nike Inc. announced on May 31 that it would divest Cole Haan and European football brand Umbro by May 31, 2013, the end of its fiscal 2013.

The banker said in addition to Cole Haan, an action sports brand such as Neff Headwear could also prove an interesting candidate for VF. The Camarillo, Calif.-based surf, skate and snowboard lifestyle brand is looking to be acquired by a large strategic, according to founder Shaun Neff.

Neff Headwear generates between $40 million and $90 million in revenue. It sells jackets, T-shirts, hoodies, watches and sunglasses. Neff said that gaining the logistical resources of a company such as VF could be useful.

Although VF was a bidder for Eddie Bauer Holdings Inc.'s intellectual property after it filed for bankruptcy in June 2009, the banker said it was doubtful that VF would look to acquire the company, now named Eddie Bauer LLC. VF was only interested in acquiring Eddie Bauer's intellectual property or trademarks at the time, not the apparel retailer's stores, the banker said.

Mike Egeck, a former VF executive, was recently named CEO of Bellevue, Wash.-based Eddie Bauer, which was acquired by San Francisco-based private equity firm Golden Gate Capital for $286 million in a July 2009 bankruptcy auction.

Also, Wiseman said VF is always evaluating its portfolio for divestitures, following its disposal of John Varvatos Enterprises Inc. on March 8. VF, along with designer John Varvatos, sold a majority stake in the company to private equity firm Lion Capital LLP.

Wiseman declined to comment on specific divestitures.

VF had $326 million in cash and cash equivalents and about $1.8 billion in long-term debt for the first quarter ended March 31, according to filings with the Securities and Exchange Commission. The company had revenue of nearly $9.5 billion and operating income of about $1.2 billion for the fiscal year ended Dec. 31, 2011.
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Tags: Eric Wiseman | Timberland Co. | VF Corp.

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Richard Collings

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