VF Corp. sells its contemporary brands businesses to Delta Galil Industries
VF Corp has signed a definitive agreement to sell its contemporary brands businesses to Delta Galil Industries for $120 million. Brands included in the transaction are apparel lifestyles 7 for All Mankind, Splendid and Ella Moss, which have been challenged lately due to the sluggish demand for everyday, more basic apparel. VF Corp owns brand such as Nautica, Timberland, Lee, Wrangler.
The news shouldn’t come as a shocker to investors based on the performance of the contemporary brands portfolio last year and VF Corp.’s renewed focus on driving productivity. Sales for the segment fell 14% year over year to $344 million last year, or a drop of 11% excluding the impact of the strong U.S. dollar. Profit plunged 75% to $5.8 million, or 64% when backing out the effect of the strong U.S. dollar. The weak performance caused VF Corp. to record a $144 million pretax, non-cash impairment charge in the fourth quarter of 2015 to reduce the carrying value of intangible assets related to the 7 For All Mankind, Ella Moss and Splendid brands