Recently, the American outdoor sportswear giant VF Corporation (hereinafter referred to as “VF”) announced the sale of nine brands in its workwear department to a subsidiary of the American diversified holding company Redwood Capital Investments LLC. The two parties have reached an agreement and the transaction is expected to be completed in the first quarter of fiscal year 2022.
VF Group will divest 9 major professional wear brands in its Work product line department, including: American century-old workwear brand Red Cap, pan-work uniform brand VF Solutions, professional protection Workwear brand Bulwark Protection, professional industrial safety workwear brand Walls, Canadian work safety shoe brand Terra, Canadian outdoor boots brand KODIAK, public safety and postal workwear brand Horace Small, professional firefighting clothing brand Workrite and Canadian professional safety shoe brand WorkAuthority.
Previously, VF had revealed that it was exploring strategic options for part of its workwear business, which did not involve its well-known American workwear brand Dickies and safety shoe brand Timerland. PRO.
Steve Rendle, Chairman, President and CEO of VF Group, said, “VF Group’s sale of its workwear brands reflects the company’s continued commitment to becoming more consumer-oriented and retail-oriented. As the Group pivots to further simplify its portfolio and operating model, we are delighted to be partnering with Redwood Capital, who are the ideal owners to lead these brands and businesses into their next phase of growth.”
In January this year, VF Group announced key financial data for the third quarter (as of December 26, 2020). Sales fell 6% year-on-year to US$3 billion, and net income fell 25% year-on-year to US$465 million.
VF Group executives talk about the future of Supreme: We will be careful to avoid overburdening the brand
American outdoor sportswear giant VF Corporation (hereinafter referred to as “VF”) announced key financial data for the third quarter (as of December 26, 2020) on Wednesday. Sales fell 6% year-on-year to US$3 billion, and net income fell year-on-year. 25% to $465 million. However, the group raised its full-year revenue forecast for 2021.
Although sales of its portfolio brands continue to decline, VF Chairman, President and CEO Steve Rendle is optimistic, saying: “Despite the disruption caused by the epidemic-related issues, we business, but our third quarter results basically exceeded expectations.”
About the future of Supreme
On December 28, 2020, VF Group completed the acquisition of Supreme, a famous New York street fashion brand, for US$2.1 billion.
Steve Rendle said: “We are willing to fulfill transactions during the epidemic because Supreme’s business model is resilient, we took early and decisive action to ensure liquidity, and we are committed to We are increasingly confident in the trajectory of our existing brand portfolio.”
“We are delighted to finally acquire Supreme. This move builds on the actions we have taken over the past four years. As a further validation, we are positioning our portfolio in market areas where there is significant consumer demand.”
Scott Roe, executive vice president and chief financial officer, said: “We are now entering a period of integration stage, and carefully integrate Supreme into the VF family. We will adopt moderate management and supervision where necessary, while taking a gentle approach in other areas to avoid overburdening the brand.”
“We are committed to serving the brand and team as always. We are exploring how to activate synergies at the right time while driving brand growth and strategic vision. Although it is still in its infancy, VF We and the Supreme team are very much looking forward to the future, and we have made a good start.”
In response to the new crown epidemic, previously VF Group’s brands A large number of stores are temporarily closed.
In North America, all stores have reopened by mid-October. But then the epidemic returned with a vengeance, and as of the end of December, about 15% of stores were closed again.
Similarly, at the beginning of the third quarter, almost all stores in the Europe, Middle East and Africa (EMEA) region were open. But by the end of the quarter, it was forced to close about 50% of its stores.
In the Asia Pacific (APAC) region, almost all of the company’s stores were open throughout the quarter. Among them, sales in Greater China increased by 18% year-on-year, and sales in mainland China increased by 22% year-on-year.
In early January, VF announced an Asia-Pacific business transformation plan. Steve Rendle said in the conference call: “The highlights include the following: We will move the brand operations center to Shanghai and move the Asian product supply center to Singapore.
I will also Redeploying some product supply talent and resources in key sourcing countries to work more closely with key suppliers and improve efficiency. We will add an additional facility in Kuala Lumpur, MalaysiaA shared services center that serves as the central activity for functions within our enterprise. “VF will complete this transformation transition in the next 12 to 18 months.
The epidemic prompted the company to accelerate its shift to e-commerce operations. In the third quarter, VF directly Online sales to consumers increased 53%.
VF currently expects fiscal 2021 revenue to be in the range of $9.1 billion to $9.2 billion (including acquisitions Supreme will bring in approximately $125 million in revenue in the second quarter), compared with the previous forecast of $9 billion. Refinitiv IBES forecast was $9.19 billion.
The The company also expects fiscal 2021 adjusted earnings per share of approximately $1.30 (including a contribution of approximately $0.05 from Supreme), compared with the previous estimate of $1.20. The Refinitiv IBES estimate was at $1.36.
Excluding one-time items, VF forecast earnings per share of 93 cents, compared with analysts’ average estimate of 90 cents. However, the company raised its net revenue estimate from 33.8 cents to 33.8 cents. billion fell to US$2.97 billion, slightly lower than the average analyst estimate of US$3 billion.
Steve Rendle concluded: “Our investment portfolio will continue to improve in the fourth quarter. To resume growth, we are confident in VF’s growth plan for fiscal 2022 and confident in continuing to promote business model transformation. ”
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