Dive Brief:
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VF Corp. is mulling a sale of its JanSport brand, according to a Bloomberg report citing unnamed sources.
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The deal would value the 55-year-old brand, best known for its backpacks, at about $500 million, per the report.
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A spokesperson for VF Corp. declined to comment.
Dive Insight:
This report is another sign that VF Corp. is looking to alter its trajectory. Last week the company surprised many observers with its announcement that CEO Steve Rendle, a 25-year company veteran and chief executive for six years, had left.
At the time the company lowered its guidance once again, and reported difficulties across categories, channels and regions. That includes weaker demand, especially in North America, which has led to promotions and wholesale order cancelations.
Owner of Vans, The North Face and Supreme, among other brands, the conglomerate has spent the past several years honing its portfolio, casting aside several underperforming businesses, including classic denim brands Lee and Wrangler and its workwear labels.
Two years ago the company shelled out $2.1 billion to add the cult streetwear brand Supreme to its stable. VF Corp. has some $900 million in debt coming due next year, in part from its purchase of Supreme, and its financial “choppiness” lately would likely require the company to refinance with less favorable terms, according to Wedbush analysts led by Tom Nikic. Selling off JanSport would help lower its debt levels and mitigate that, somewhat, Nikic said in a Monday client note.
But the company is unlikely to get $500 million for JanSport alone, Nikic also said. The brand is run within VF’s “active” segment, which also includes Vans, Supreme, Kipling and Eastpak, and JanSport likely brings in some $100 million to $150 million each year, according to Wedbush.
“The last time management discussed the performance of JanSport on an [earnings] call was more than 7 years ago, so it would seem the brand isn't core to the strategy,” Nikic said. “VFC doesn't provide much clarity about the brand's performance, but we believe it is a fairly small brand.”
