VF Corp. CEO sees more acquisitions
NEW YORK (Reuters) - VF Corp. (VFC.N), whose brands include Lee jeans, North Face jackets and Vans shoes, plans to keep up its pace of acquisitions with a keen eye on outdoor and sportswear brands that cater to women, its chief executive said on Wednesday.
"We have a lot more resources behind our acquisition strategy today," CEO Mackey McDonald said at the Reuters Consumer and Retail Summit in New York. "Part of that is (because) it's tougher. Everyone is aware of the fact that it's a tough climate out there with a lot of private equity funds looking for opportunities."
McDonald said he does not expect the pace of retail buyouts to slow down, so more people at VF Corp. are spending their time evaluating opportunities.
"Our focus today continues to be on the outdoor and sportswear categories, and probably with a little more emphasis on the female side," he said.
The company, which also owns Wrangler jeans, JanSport backpacks and Nautica and Reef sportswear, acquired luggage maker Eagle Creek and sports apparel company Majestic Athletic earlier this year.
"We feel confident we'll continue to make a couple (acquisitions) each year, and maybe more, when we find the right brands," McDonald said in an interview with Reuters Television. "But the good news is our organic growth is very strong so we are not forced to do acquisitions."
Aside from its "clear focus on acquisitions," McDonald said the company was also looking to expand overseas and open more of its own single-brand retail stores.
Currently, much of Greensboro, North Carolina-based VF Corp.'s $6 billion in sales comes through department stores like J.C. Penney Co. Inc. (JCP.N) and Macy's Inc., (M.N) or discounters such as Wal-Mart Stores Inc. (WMT.N) and Target Corp. (TGT.N)
VF's Vans brand, which began with skateboard-inspired sneakers, currently operates about 140 retail stores. VF is also building more stores to sell its North Face, Reef, Kipling, Napapijri and John Varvatos brands.
"We will have close to 900 of our own retail outlets by the end of 2009," McDonald said, up from about 600 at present.
About 25 percent of revenues currently come from overseas, but McDonald is aiming to increase that to 30 percent by 2009, by setting up jeans shops in India and China to sell Lee and Wrangler jeans, and expanding its businesses in Western and Eastern Europe.
McDonald said the company already has a presence in the key emerging markets of Brazil, Russia, India and China. In India, the company set up a joint venture with local denim and apparel maker Arvind Mills Ltd. ARMI.BO
VF shares, which have gained about 39 percent over the last year, closed down $1.16, or 1.2 percent, to $92.71 on the New York Stock Exchange.
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