Corporation VF contemplates JanSport sale, according to Bloomberg report
VF Corp., the American clothing and footwear company, is reportedly considering the sale of its JanSport brand, known for its iconic backpacks. This potential move comes amidst financial difficulties and a strategic shift in the company's portfolio.
Two years ago, VF Corp. added the cult streetwear brand Supreme to its stable for a whopping $2.1 billion. However, analysts now doubt that VF Corp. could fetch $500 million for JanSport alone. The brand is estimated to be valued around this amount.
The financial "choppiness" of VF Corp. has led to the possibility of the company needing to refinance with less favourable terms. This is partly due to a $900 million debt coming due next year, part of which was incurred from the purchase of Supreme.
Weaker demand, particularly in North America, has resulted in promotions and wholesale order cancelations at VF Corp. This, combined with difficulties across categories, channels, and regions, has led to the company lowering its guidance.
Steve Rendle, a 25-year company veteran and chief executive for six years, recently stepped down from his position. Rendle oversaw the company's strategic shifts, including the casting aside of several underperforming businesses such as classic denim brands Lee and Wrangler, and its workwear labels.
The last time management discussed the performance of JanSport was over seven years ago. Despite the lack of recent updates, JanSport remains part of VF's "active" segment, which also includes Vans, Supreme, Kipling, and Eastpak.
The sale of JanSport could help lower VF Corp.'s debt levels and mitigate its financial challenges somewhat. However, as of now, VF Corp. has not designated a specific buyer for the brand package if the sale occurs. The company spokesperson declined to comment on the potential sale.
While VF Corp. does not provide much clarity about the brand's performance, it is believed that JanSport likely brings in some $100 million to $150 million each year. Selling off JanSport could signify a change in VF Corp.'s trajectory, as the company continues to navigate through its financial challenges.
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