V.F. Corp (VFC) Offloads Nautica Brand, Enhances Portfolio

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V.F. Corporation VFC successfully completed its previously announced sale of the iconic Nautica brand to Authentic Brands Group, LLC, a leading brand-development and entertainment company based in New York. The terms of the deal remained under covers.

The company agreed to sell this brand on Mar 19, 2018, in sync with its global business strategy that focuses on rapidly responding to the changing marketplace while targeting huge shareholder returns.

V.F. Corp's four-point strategy is focused on redesigning portfolio and empowering its key brands; adopting a consumer and retail-centric model; enriching direct-to-consumer and digital businesses; and directing investment to Asia, particularly China. Further, these plans are going to be aided by increased investments in design and innovation; demand creation and brand experience; insights and analytics; retail excellence; demand and supply-chain agility and talent.

In order to reshape brand portfolio and drive growth across all categories, the company has been aggressively making acquisitions. Some recent ventures in this direction include the agreement to buy Altra footwear brand from ICON Health & Fitness, Inc. and the acquisition of outdoor and sports apparel company, Icebreaker Holdings Ltd. While the acquisition of Altra is likely to boost growth across V.F. Corp's direct-to-consumer and international channels, the addition of the Icebreaker brand is going to enhance its SmartWool brand portfolio. These acquisitions are likely to be immediately accretive to the company's bottom line.

Further, the company is looking to better serve customers by enhancing distribution services in the Northeastern United States. For this, it announced plans to establish a new distribution center in Jonestown, PA. The new 500,000 square-feet facility will help in fulfilling the significant increase in sales due to growth of its direct-to-consumer business. The facility will carry out the distribution of products for the Vans, The North Face and the Timberland brands. The company expects the lease to begin in July 2018 and the facility to be fully operational in early 2019.

The sale of Nautica brand did not have any major impact on V.F. Corp's share price. However, this Zacks Rank #3 (Hold) stock has gained 10.6% in the past month, outperforming industry 's growth of 8.9%.

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Some better-ranked stocks in the same industry include Columbia Sportswear Company COLM , Ralph Lauren Corp. RL and PVH Corp. PVH , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Columbia Sportswear has improved 10.6% in the last three months. Moreover, the stock has long-term growth rate of 10.2%.

Ralph Lauren has long-term growth rate of 10.2% and has advanced 19.8% in the last six months.

PVH Corp., with long-term earnings per share growth rate of 13%, has jumped 25.2% in the last six months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: VFC , COLM , RL , PVH

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