“Our teams across VF have made tremendous progress to prepare for the successful separation of Kontoor Brands from VF and this filing is a significant next step in this process,” said Steve Rendle, Chairman, President and CEO of VF Corporation. “We are highly confident that the separation is the best path forward for both organizations to achieve even greater potential and enhance long-term shareholder value.”

The separation is on track to be completed in May of 2019, subject to final approval by VF’s Board of Directors, customary regulatory approvals, and tax and legal considerations.

“This is an exciting next step in our work to establish our jeanswear organization as an independent , public trading company . Kontoor brands – a creative variation of the word ‘ Contour’ is a compelling name that will preserve each brand’s unique identity while also providing the opportunity to evolve the company in the years ahead ” says VF Corp CEO Steve Rendle .

The selection of the name has been an important part of the creation of the new company. The office of Kontoor Brands would be created in the historic Revolution Mill in Greensboro, North Carolina , that has been transformed into a mixed-use campus that includes commercial, residential, restaurant and studio space. VF is currently based in Greensboro, but will be moving its headquarters to Denver along with its diverse portfolio of brands that includes Vans, The North Face and Timberland.

“In choosing a name for the new company, it was important for us to select something that serves as an umbrella for our iconic jeanswear brands and provides us with the opportunity to advance our portfolio in the future. The selected name was inspired by the idea of a perfect fit, which speaks to the rich legacy and storied history of our brands. I’m excited about the opportunities that lie ahead for Kontoor Brands as an independent, publicly traded company,” added Scott Baxter, named CEO of Kontoor Brands.

The design takes you on a nostalgic tour as each article of this collection is inspired by 90s oversized silhouettes,mid-indigo denim-washes, big long-sleeve blouse, and wide-leg denim pants. The collection goes against the norms of double denim usage – using different shades and tenor of blues for top and bottom – and displays subdued blues for both. The large pockets, bold stitches, and puckering effect reduce to some extent the monotonous single shade but still …….

The collection will be available at European stores, designated retailers and the NORTH FACE Prototype Store (Williamsburg, Brooklyn, NY).

VF owns over 20 brands and out of which Wrangler and Lee are those brands which have been planned to be allocated to a new and separate publicly traded business. Is this because Athleisure bringing more revenue over Denim? Or there are other reasons to it ? The market has expressed many conjectures over this and many reports suggest that this might lead to the permanent exit from the denim business after sometime.

“Our Jeans platform is a successful, sustainable business with iconic global brands and a clear path to value creation as a standalone entity,” said Chief Executive Steve Rendle. Separately, VF said it will move its headquarters to the metro Denver area, from North Carolina.

REASONS OF PROPOSED SPIN OFF OR SALE

• This separation might have also planned to allow the denim business to expand its geographic footprint with a sharp focus in Asia, including India and China. The aggressive penetration of other Jeans brands including Zara and H&M in Asia might have somehow troubled VF also as both these brands have been aggresively expanded in past few years.
• Another reason of this spin off could be because of the fact that denim is losing market share to leggings and yoga pants and According to Wall Street Journal, denim used to account for half of VF Corp’s revenues in the 1980s, but that is no longer the case. In 2016, the company has also sold 7 for all Mankind and Nautica – both were also the denim brands .

THE NEW SET UP

The new denim company would be based in Greensboro, N.C., the home of Wrangler and the headquarters of the VF corp. will be moving to the metro Denver area, which will have brands including The North Face, JanSport, Smartwool, Altra and Eagle Creek, as well as a Global Innovation Center for Technical Fabrics and a Digital Lab. Movement to Denver is also supposed to be because of better tax breaks.

Scott Baxter, who oversaw VF’s jeans division from 2011 through 2015, will be the CEO of the new company, while Rustin Welton will be its Chief Financial Officer, subjected to the completion of this entire spin off procedure.

HISTORY OF LEE AND WRANGLER

The Lee brand was introduced in 1912 by Henry David Lee, however, Wrangler made its debut in 1947 as western wear, with stiff, blue jeans designed by celebrity tailor Rodeo Ben. The company acquired Lee in 1969 and Wrangler in 1986. The denim business happened to be VF’s core—delivering more than half of its revenue in 2002—until the company began to diversify by adding up other brands in different segments including activewear and footwear.

PERFORMACE OF DENIM IN VFC

The market value of VFC stands out at $38 billion, and it has been focusing to widen its porfolio by adding more and more lifestyle brands. The recent addition of VANS, The North Face Jackets, and Timeberland boots were very successful and have outperformed in some quarters against the denim segment business.

VF’s denim business last year had $2.66 billion in sales and $422 million in profit. The overall U.S. jeans category had total sales of $16.2 billion in 2017, down from $18.8 billion in 2013, according to Euromonitor International. Another denim brands under VF – Rustler and Rock & Republic brands, had also underperformed and the sales of these brands have fallen nearly by 5% since 2015 and the profit by 2%.

In the recent forecasts made by VF itself, the company forecasted growth this year for most of its divisions except jeans, however the revenue is forecast to be the same from the last year.

US denim industry has not been in the pink of health in recent times. Denim mills like Cone have closed down and many retailers are finding it difficult to compete in these difficult times. It remains to be seen if VF would like to give fresh life to their denim operations through another company or is this the first step towards exit from the denim world !

1. Revenues For The Fourth Quarter

The revenues for the different segments for the fourth quarter from 2016 to fourth quarter 2017 saw that the total revenues changed positively by 20% . The revenues in fourth quarter for Outdoor & Actions Sports increased by 16% from about $2.16 billion in 2016 to $2.50 billion in fourth quarter 2017. The revenues for Jeanswear did not increase much and showed only a growth of about 2%. However, Image wear segment saw a substantial growth in revenue of a huge 176% in fourth quarter 2017 to reach a turnover of about $406 million usd.

Outdoor & Action sports is now the mainstay of VF with about 69% of total turnover while Jeanswear is lagging at 19% only and the rest is divided among different segments.

2. Revenue For Full Year

The revenue in different segments for the full year of 2017 show that major action is happening in Imagewear only which has shown 50% growth. Jeanswear is where mid priced retailers like VF are struggling and not able to compete with fast fashion retailers like H&M. The company has shown negative growth of 3% for Jeanswear for the whole year while Outdoor and Action Sports segment has shown a healthy growth of 8% to reach a total turnover of about 11.8 billion USD for the whole year . The overall top line growth has been 7% in 2017.

The pie – chart saw that the revenues for the full year of 2017 for the different segments like Outdoor & Action Sports was 70% of the total revenue , Similarly the revenues for Jeanswear, Imagewear and Other were 22%, 7% and 1% respectively for the full year of 2017.

3. Profit/Loss

The pie – chart saw that the profit for the fourth quarter of 2017 like Outdoor & Action Sports was 78% of the total revenue , similarly the Jeanswear, Imagewear was 16% and 6% of the total revenue. This again clearly shows that VF is now more of a Outdoor & Action Sports company than a Jeans company.

4.Profit/Loss

The total profit , however, did not increase in the same volume as that of fourth quarter. The profit increased in total by 4% only . These profits were dragged down by the Jeanswear segment which reduced its profit by 14% . The pie- chart saw that the profit for different segment in 2017 like Outdoor & Action Sports was 22% of the total revenue , similarly for Jeanswear, Imagewear was 72% and 6% of the total revenue of 2017.

5.Geographic Revenue Growth

The Percentage change in revenue for fourth quarter of 2017 from the same period in last year , saw that the revenue growth for U.S increased by 15% , Similarly the revenue growth in EMEA, APAC, China , Americas and Internatianal increased by 33%, 17%, 23%, 35%, respectively for the fourth quarter of 2017. However the geographic revenue growth for the year 2017 in U.S was 4% , similarly for APAC, China, Americas(Non- US) and Internationally was 15% , 6% ,10%, 13% ,12% respectively.It is also to be seen that the maximum revenue growth was in EMEA and Americas(non U.S) for both fourth quarter and full year of 2017.

6. Channel Revenue Growth

The channel revenue growth for Wholesale Channel and Direct – to – consumer channel for fourth quarter of 2017 increased about 19% and 22% from the last year of the same period and that of the full year was 17% and 20% respectively.

Wrangler launched its limited collection named 27406 collection using the last of the selvedge denims produced by Cone. 27406 Collection , named after the zip code where the denim is cut and sewn in the Wrangler’s hometown of Greensboro, North Carolina, is crafted by Wrangler’s team of skilled sewers and fabric cutters. The collection uses denim from the Cone Denim® White Oak Plantâ„¢ and the expert sewing and fabric cutting team from the Wrangler Service Support Center crafted each piece for the collection. The selvedge styles are constructed from denim woven recently in White Oak.

Denim in hand, the team cut the fabric and hand-stitched the belt loops, pockets, signature W, and iconic Wrangler patch. Once complete, each piece is stamped on the inside, numbered and signed off on by the sewer who completed it. For this collection, the Wrangler Service Support Center acted as a small manufacturing facility with the design creation, fabric development and manufacturing happening within a 3-mile radius.

Look for the signature detail of the selvedge edge on the inside waistband, inner cuff and front placket. On each jacket, you’ll find four unique features: an American flag sewn into the waist, and a riser label above the left chest pocket. Finally, the defining “W” stitch on the front pockets, inspired by cattle-branding. The “W” first appeared on the pockets of Wrangler jeans in 1947, signifying “Western Wear.”

Scroll down to see some of our best pick from the collection, the headline of each article has its name , price and number of pieces manufactured.

27406 MEN’S SELVEDGE DENIM JACKET | $265.00 | Only 88 Units

27406 MEN’S RIGID SLIM FIT SELVEDGE JEAN | $ 225.00 |Only 149 Pairs

27406 WOMEN’S DENIM JACKET |$265.00 | Only 62 Units

WRANGLER® 27406 WOMEN’S RAW SKINNY JEAN |$225.00 | Only 152 Pairs

1. Third quarter revenue from continuing operations increased by 5 percent to $3.5 billion.
2. Outdoor & Action Sports revenue increased by 8 percent.
3. International revenue increased by 13 percent , including 18 percent growth in Europe and 9 percent growth in China.
4. Direct-to-consumer revenue increased by 18 percent.

“VF’s third quarter results were strong, fueled by accelerated momentum across the company’s international and direct-to-consumer platforms and our Outdoor and Action Sports and Workwear businesses. Based on the strength of our third quarter performance and the stronger growth trajectory we see for the remainder of 2017, we are again increasing our full year outlook and making additional growth-focused investments aimed at accelerating growth and value creation into 2018 and beyond. VF remains committed to returning cash to shareholders as evidenced by the increase in our dividend, which is supported by the strength of our balance sheet and the confidence we have in our strategic growth plan”,said Steve Rendle, President and Chief Executive Officer

SEGMENT WISE REVENUE AFTER 3 MONTHS ENDED ON SEPT 30 , 2017 & 2016

Though there is an increase of 5% in total revenue for this quarter ended on Sept 30 , 2017 , but going into deep we found that the Jeanswear is loosing its revenue by 1% after comparing the figures of the last year for the same quarter. Sportswear has nil growth in terms of revenue and the uncategorized segment ( Other) has declined by 6% in this quarter. Imagewear and Outdoor & Action Sports are the two biggest gainer in this quarter with 9 % and 8% growth in their revenue respectively . Outdoor & Action Sports is the biggest contributor in the revenue with 71% share in the total however Jeanswear contributes only 20 % .

SEGMENT WISE REVENUE AFTER 9 MONTHS ENDED ON SEPT 30 , 2017 & 2016

With the summation of the revenue of 9 months of this year ended on Sept 30 , 2017 , we noticed the overall growth of revenue is 2% . Outdoor & Action Sports and Imagewear marked a positive change of 5% in the revenue however the rest segments including Jeanswear and Sportswear are on adverse growth . Jeanswear reduced by 5% while the revenue of Sportswear by 6% .

SEGMENT WISE PROFIT/LOSS AFTER 3 MONTHS ENDED ON SEPT 30, 2017 & 2016

While there is a growth of 5% in revenue , the profit has been increased by 2% only for the quarter ended on Sept. 30 ,2017. Out of the total profit of USD 684 million 76% has been contributed by Outdoor & Action Sports and 18% by Jeanswear . Jeanswear’s profit has been reduced by 15% in this quarter however the uncategorized segment lost by 116 % . Sportswear is the biggest gainer in this quarter with 16% rise in profit . Outdoor & Action Sports increased by 7% this quarter .

SEGMENT WISE PROFIT/LOSS AFTER 9 MONTHS ENDED ON SEPT 30, 2017 & 2016

While analysing the profit for 9 months , we noticed the reduction in profit by 2 % . Jeanswear lost the profit by 17 % while there is a rise of 6% in profit for Sportswear. Outdoor and Action Sports registered a fairly reasonable growth in the profit of 4% while Imagewear is on declining side with adverse growth of 3%.

% CHANGE IN PROFIT/LOSS AND REVENUE FOR THE QUARTER ENDED SEPT.30 , 2017

Looking at the below analysis , there are many surprising facts we came to know , some of the following are below :

• Sportswear has 0% change in revenue however this segment has managed to register a growth of 16% in the profit .
• The uncategorized segment ( Other) has registered an adverse growth of merely 6% however there is an adverse growth of 116% in profit .The same happened with Jeanswear as well , its revenue lost by 1% however the corresponding segment lost its profit by 15% .

WRANGLER & LEE REVENUE GROWTH IN DIFFERENT REGIONS FOR 3 MONTHS ENDED ON SEPT. 30 , 2017

WRANGLER & LEE REVENUE GROWTH IN DIFFERENT REGIONS FOR 9 MONTHS ENDED ON SEPT. 30 , 2017

REVENUE GROWTH – DISTRIBUTION CHANNEL

Outlook For 2017 As Per VF

Revenue is now expected to increase about 6 percent on a reported basis to approximately $12.1 billion. This compares to the previous expectation of $11.85 billion, a 3.5 percent increase on a reported basis . Both estimates include about a $200 million contribution from the previously announced Williamson-Dickie acquisition. By coalition, revenue for Outdoor & Action Sports is now expected to increase approximately 7 percent versus the previous expectation of an approximate 5 percent increase ; revenue for Jeanswear is now expected to decline slightly versus the previous expectation of revenue that approximated that of 2016; Imagewear revenue is still expected to increase at a mid-single-digit percentage rate; and, Sportswear is still expected to decline at a high single-digit percentage rate. International revenue is now expected to increase approximately 10 percent versus the previous expectation of a low single-digit increase . Direct-to-consumer revenue is now expected to increase approximately 13 percent versus the previous expectation of a 10 percent to 11 percent increase.

About VF

VF Corporation outfits consumers around the world with its diverse portfolio of iconic lifestyle brands, including Vans®, The North Face®, Timberland®, Wrangler® and Lee®. Founded in 1899, VF is one of the world’s largest apparel, footwear and accessories companies with socially and environmentally responsible operations spanning numerous geographies, product categories and distribution channels. VF is committed to delivering innovative products to consumers and creating long-term value for its customers and shareholders. For more information, visit www.vfc.com.

Check the World’s First Virtual B2B Platform for Denim Buyers and Suppliers . To visit , please click here.

At the end of six months of the year 2017 , VF’s sales value stood at USD 4941.26 Million which is marginally lesser than the sales of 2016 for the same period . In the year 2016 , it was USD 4954.88 Million . Improvement were seen in Outdoor & Action sports and Imagewear segments continuing the trend of 1st quarter and both increased in the range of 3%. These were the only bright spots in the , otherwise , bleak picture painted by the results. Jeanswear, once the mainstay of VF, were down a significant 6.83% and seem to be sliding down with each passing quarter. The mid priced denim brands globally are feeling the pain that VF is currently going through. Sportswear was the worst performer outpacing Jeanswear in the downtrend. Outdoor and Action Sports is now the MAINSTAY of VF with about 64% of sales .

Profits

So far as profit is concerned , VF’s earnings declined by 7% and reached to USD 613.25 Million from USD 655.91 Million . Outdoor & Action sports managed to keep its profitability with no change . The major decline has been reported in Jeanswear which is 18% . This is really significant – showing that the profits 3 times as fast as the revenue of Jeanswear fell reflecting the fact that per unit profit of jeans has fell to drastic low levels. The Sportswear profits also fell by 7% by the end of half year in 2017 .

In summary, VF is fighting a tough market where its only able to perform well in one segment ie Outdoor and Action Sports. Jeanswear, for which it was once known for , has taken a nosedive and if the trend continues , VF may see serious problems coming up in some of its denim brands. The company really needs to introspect and innovate and bring up new strategies for their Jeanswear, Imagewear and Sportwear categories .

In this report we have done the detailed analysis as well as comparative analysis for 1st quarter of 2017 and a comparative analysis for the same period of last year.

In the 1st Quarter of 2017, VF Corporation’s total revenue is $2581.7 million, out of which outdoor & Action Sports was $1678.8 million which is 65 %(approx) share of total revenue. The sales in Jeanswear has fallen by 9% while Imagewear fell about 5% which is not a normal reduction and shows significant loss of market. There is a huge fall of 17 % in Sportswear sales compared to last year and the other segment also saw a fall of 2 %. On analysis we can find that Outdoor & Action Sports is the current flavor of the consumers and VF, like many other brands, are trying to are struggling to sustain their denim and sportswear sales.

If we look at the profit sharing of different segments ,there is marginal increase in the Outdoor & Action Sports by 1 % from the Q1 of last year ,however the Jeanswear segment reduced substantially by 14% which shows that the actual realisations per unit of jeanswear is lower than last year . There is a fall of 7 percent in the share of total revenue of Imagewear segment. . The Sportswear segment is now a loss making proposition for VF and the company has not made any money on Sportswear sales.

To summarise , Outdoor and Action Sports is the only segment working for VF right now and it seems to find itself in a spot in most other segments. It needs to pull up its socks to keep up in the tough business conditions !

In this report we have done a detailed analysis as well as comparative analysis between the 1st Quarter 2016 and the same quarter in the last year.

	In Millions ( US$)
Particulars	Q1 – 2015	Q1 – 2016	%
Outdoor & Action Sports	1606.9	1644.4	2.3%
Jeanswear	699.7	710.6	1.5%
Imagewear	282.9	269.1	-5.1%
Sportswear	135.7	118.4	-14.6%
Contemporary Brands	87.5	74.4	-17.6%
Other	24.6	22.4	-9.8%
Total Revenue	2837.3	2839.3	0.1%

In the 1st Quarter of 2016, VF Corporation’s total revenue is US $2839.3 million, out of which Jeanswear was $710.6 million which is 25 %(approx) share of total revenue. The share of Jeanswear has risen marginally by 1.5% while Outdoor & Action Sports has taken a jump of about 2% in sales. This is not surprising as Activewear is the current flavour of the consumers and VF, like many other brands, is trying to struggle to keep their denim sales to the same levels. If we look at the revenue distribution of Sportswear , there is a fall of 14.6% from the same quarter of last year . Except Outdoor Sports and Jeanswear , rest of the segments registered a fall in the revenue.

If we look at the profit sharing of different segments ,there is marginal increase in the Jeanswear by 4.1 % from the Q1 of last year ,however the Sportswear segment reduced substantially by 62.5% . There is a fall of 1 percent in the share of total revenue of Outdoor and Action Sports segment. In the Q1 2015 ,the share was 56% however in Q1 2016, it reduced to 55%. The Jeanswear segment raised and increased its share in total profit by 5 % . In Q1 2015 it used to 28% while in Q1 2016 it reached to 33% which clearly shows how important this segment is getting to be for VF. And not only VF, it is true for many other brands who have a diversified portfolio.If we analyze the profit sharing from comparative prospective , we found that the there is a downfall in the profit by 12.7% of Outdoor and Action Sports Segment . In Q1 2015 , the profit was $260.8 million while in Q1 2016 it is only $ 227.8 million. Even in the case of Sportswear , the fall is of 62.5% which is huge .

Looking at the change in the revenue against the changes in profit in the Q1 of 2015 and 2016, we found that only Jeanswear is sole segment in which growth in profit is more than growth in revenue. The revenue increased by 1.5% while the profit margin increased by 4.1%. Rest of the segments are showing decrease either in revenue or profit or in both.

The story is not much different when we consider the contribution of different segments to the profit margin. Though the absolute contribution of the Outdoor segment was expected to be the highest, the % share also increased in this case while all other segments reported reduced profits . Jeanswear’s contribution to the profitability has been increased .

On the whole, VF is increasingly becoming a corporation getting its maximum turnover and profits from Activewear as well as Jeanswear segment and looks increasingly focused in this area as more and more energies of the organization get diverted to this high return segment.

The jeans are created with a 8.5oz stretch denim fabric that allows the denim to move with breathability and comfort.It is available in five fits, including skinny, straight and boot cuts, and four three exclusive washes comprising blue, black and distressed treatments. The jeans is supposed to combine light fabric with authentic looks of denim. The new jeans will have different washes in various shades of blue and black. Currently, Bair Denim is confirmed to retail at Nordstrom and Saks Fifth Avenue. The launch will take place at the end of June at the same time of the brand’s fall collection. The jeans will retail for US$ 169-US$179/-

Sevens as the brand is commonly known also introduced the Foolproof category of jeans in its stable earlier this year. The jeans launched in Spring 2016 were claimed to be stretch but shrink free and were offered in three price points range from $169 – $189 with the product available in store and online.