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Dive Brief:
VF Corp. has an agreement to sell its Dickies workwear brand to Bluestar Alliance for $600 million in cash, the apparel conglomerate announced on Monday.
The transaction is expected to close by the end of the year, subject to customary closing conditions and regulatory approvals, the company said.
Dickies has struggled, though declines there moderated during the most recent quarter.
Dive Insight:
As its turnaround drags on, VF Corp. has been steadily unloading its less well-performing brands, and Dickies is the latest to drop.
The company held on to Dickies when it sold off nine workwear brands over four years ago, part of an effort to trim its brand portfolio that started with its 2018 spinoff of classic denim brands Wrangler and Lee. At the same time, in 2020, VF acquired cult label Supreme for an eye-popping $2.1 billion, but pulled the plug last year and sold it for much less. S&P Global Ratings analysts early in 2024 had predicted that the company would have to sell off more of its assets in order to trim its debt.
That makes Monday’s announcement predictable, according to a research note from Needham analysts led by Tom Nikic, who estimated that “the company is not losing much EBITDA, but is taking a healthy chunk out of the debt balance, improving the debt leverage by about half a turn.”
“This deal does not surprise us, given CEO Bracken Darrell’s focus on debt paydown (recall the company sold Supreme for $1.5 billion in July 2024) and on accelerating growth within its three core brands The North Face, Vans, and Timberland,” Nikic said.
Darrell acknowledged those dynamics on Monday.
“As I’ve said before, we continuously evaluate our portfolio and this transaction will enable us to bring our net debt level down and will be accretive to our growth on a pro-forma basis,” he said in a statement.
In its most recent quarter, VF reported flat year-on-year revenue of $1.8 billion, beating its own expectations, with Timberland and The North Face continuing as the company’s strongest performers.
As VF trims its portfolio, Bluestar Alliance continues to build its own. The brand management company acquired Palm Angels earlier this year, Off-White from LVMH last year and Scotch & Soda in 2023. Its other brands include Hurley, Tahari, Kensie and Justice.
“We have followed the [Dickies] brand for many years and have a deep appreciation for its history and legacy, which VF Corporation has successfully begun to rebuild over the past few years,” Bluestar CEO Joseph Gabbay said in a statement. “We are committed to supporting the Dickies brand’s growth by leveraging our consumer insights and operational excellence to unlock its full value for all stakeholders.”