- VF Corp. plans to spin off its denim business, which includes the iconic American brands Lee and Wrangler, the company said Monday.
- VF Corp has owned the brands for decades.
- The move comes as denim sales wane amid the growing popularity of yoga pants.
Clothing giant VF Corp. plans to spin off its denim business, which includes the iconic American brands Lee and Wrangler, to focus on strengthening its outdoor and activewear brands, the company said Monday.
The move follows years of waning denim sales as consumers swap jeans for yoga pants.
VF Corp., which owns more than 30 brands, including Vans, The North Face, and Timberland, will relocate its headquarters to Denver from North Carolina as part of the split.
The yet-unnamed spinoff will consist of VF’s denim brands and outlet business, and it will remain in North Carolina. The transaction is expected to be completed early next year, pending approval from the company’s board of directors. The Wall Street Journal first reported on the spinoff last week.
Following the split, the Denver-based division is expected to generate annual revenue of $11 billion, and the denim business is expected to generate annual revenue of $2.5 billion.
Denim sales have been slowing in recent years as the popularity of yoga pants and other activewear has grown.
For the first time in history, US imports of stretchy knit pants exceeded those of blue denim jeans in the US in 2017, according to data from the US Census Bureau. Imports of blue jeans into the US have been declining since 2010.
Overall jeans sales in the US declined nearly 14% to $16.2 billion between 2013 and 2017, according to Euromonitor data cited by the Journal.
That trend has been reflected in VF Corp.’s business.
In the most recent quarter, revenue from activewear grew 25%, compared to a 3% increase for its denim business.