VF Corp. Is Under Second Activist Attack

Legion Partners Asset Management has now directed its focus on VF
VFC
Corp. It is the second activist group to go after the retail giant. The other company going after VF Corp. is Engaged Capital. It launched a campaign to change Timberland and The North Face, two of the leading VF companies.

Engaged Capital got things started last week when it laid out a plan to VF management to reduce more than $300 million in operating costs, properly support the recent Supreme acquisition, and reinvest much of the savings in The North Face and Vans, two of VF’s best known and biggest brands.

I recently discussed the failure of Vans in a blog (October 9, 2023), I was shocked to see Vans sliding into oblivion, noting that its athletic shoes do not suit the current mood of young customers. I pointed out that athletic shoes continue to be popular, but that skate shoes, a Vans specialty, are not in demand. Management was missing the mark. However, the large choice of brands had an awakening effect. Vans had been popular in California where there are special tracks to allow athletes to test the products on skateboards.

Engaged Capital wants to sell some real estate and get some fresh faces on the board. VF has already made some headway by appointing Nike
NKE
Inc. president Trevor E. Edwards to the VF board. He is the fourth new appointee in the last 18 months. His strength is in direct to consumer (DTC) sales and global branding.

A review of VF board members is likely, and it is likely that both Engaged and Legion will have something to say about any board changes. Legion Partners was involved with Macellum Advisors to push for board changes at Kohl’s. At the time, they wanted to replace the 11-member board but backed off when the board was expanded by three members. Earlier, Legion was involved with CalSTRS, the California State Teacher Retirement System, in a battle with the apparel company Perry Ellis International, Inc. to make leadership changes at that company as well.

VF Corp. is a respected company. The missteps previous management made are driving these activist actions, but I believe the problems can be corrected.

POSTSCRIPT: This is a company I really liked and would like to see survive all this activist activity. My hope is that a new management team executes a new strategy that improves operating margins and revitalizes many of its well-known brands. Here is the listing of all those brands.

Outdoors

· The North Face

· Timberland

· Smartwool

· Altra

· Icebreaker

Active

· Vans

· Supreme

· Kipling

· Napapijri

· Eastpak

· Jansport

Work

· Dickies

· Timberland Pro