VF Corp. plans to spin off its Lee and Wrangler jeans business to focus on faster-growing outdoor products and active wear such as its North Face and Vans brands.
The spinoff to shareholders should be completed in the first half of next year, Greensboro, North Carolina-based VF said in a statement Monday confirming a report last week from the Wall Street Journal. The jeans business, which has yet to be named, will be based in Greensboro, while VF will move its headquarters to the Denver area.
Sales of denim have slowed as consumers have embraced so-called athleisure clothing. Separating the business will allow management to focus more closely on it, VF said. Scott Baxter, VF’s group president, Americas West, will be chief executive officer of the new company, while finance executive Rustin Welton will be chief financial officer, VF said.
The company said the new jeans company would have annual revenue of more than $2.5 billion, compared with more than $11 billion for the rest of VF. The existing company’s faster-growing product lines have driven share-price gains, with the stock up 30% so far this year.
VF, once known as Vanity Fair Mills and founded in 1899 as Reading Glove & Mitten Manufacturing Co., has owned the Lee brand since the 1950s and Wrangler since the 1970s.
By Phil Serafino