FW: VF Corp sells Intimate Apparel business

Van: Amber van der Louw [ FashionUnited ] Verzonden: maandag 1 oktober 2007 9:17 Aan: 'newsupload-uk@fashionunited.com' Onderwerp: VF Corp sells Intimate Apparel business

 

VF Corp, the US apparel giant, has agreed to sell its Intimate Apparel division to Fruit of the Loom for $300 million in cash. VF is realigning its business strategy to focus on its jeanswear, outdoor, imagewear and sportswear businesses, with brands like Nautica, Vans, The North Face, Wrangler and Lee. "This marks an important chapter in VF's ongoing transformation toward becoming a higher growth, higher margin lifestyle company - another example of our willingness to take bold steps to enhance total shareholder value," VF's chairman and chief executive Mackey J. McDonald said in a statement. The company revealed that is was targeting annual revenue growth of 8 percent, including acquisitions, and expected organic annual growth of 5 percent. Acquisitions would play an important part in its growth strategy. Last year, the intimates division generated $800 million in revenues and around $50 million in operating income globally. The business was responsible for 12 percent of VF's total revenues and 6 percent of its operating income. VF plans to use the proceeds of the sale of the business to fund the repurchase of its shares. The company's president and chief operating officer Eric Wiseman revealed to WWD that the intimate apparel business had not been "performing at a historical level. We think with the right investment, it can return to its historic rate and performance levels and we think Fruit of the Loom can do that."

Fruit of the Loom chief executive John Holland expressed his admiration for the business his FTL is acquiring. "We are delighted at the prospect of adding such strong brands to our portfolio," he said in a statement. "We are most impressed with the heritage, experience and innovative talent of the VF Intimates worldwide team." The intimate apparel business will continue to operate under Fruit of the Loom as Vanity Fair Brands, a wholly owned subsidiary. Curt Holtz, president of VF's Intimates coalition, and his management team will continue directing current operations from headquarters in Alpharetta , Georgia and Igualada , Spain.