VF Corp. Buys Vans

Vans inc., a Southern California maker of skateboard footwear and casual apparel for young men and women, has been acquired by the VF Corp., a North Carolina–based mega-apparel company that has been on a major acquisition spree for the past four years.

The purchase price is approximately $396 million in shares and stock options. The transaction is expected to close early in VF’s third quarter, which will end Oct. 2.

Vans, based in Santa Fe Springs, Calif., has had a tough couple of years. The actionsports brand reported a net loss of $30 million on sales of $330 million in fiscal 2003 and lost $2.6 million on sales of $332.4 million in fiscal 2002. Vans officials said the company is on track to increase its sales by 5 percent this fiscal year, which will end May 31.

Vans executives said the merger with the world’s largest jeans maker will provide a much-needed cash infusion for the company, which has been losing money on its skateboard parks since their launch in 1998. To pare back expenses, Vans recently shuttered skate parks in Bakersfield, Calif., Denver, Phoenix, Atlanta and Houston. Vans officials said they plan to close four more parks by the end of the fiscal year, leaving the company with three parks.

VF Corp. officials were upbeat about Vans’ future. “We are making growth happen, and we’re doing it with a powerful brand that resonates strongly with its core teen consumer base,” said VF Corp. Chairman and Chief Executive Officer Mackey J. McDonald in a recent press release.

McDonald said the acquisition will add to VF’s increasing market share in outdoor and sportswear brands such as The North Face and Nautica. He noted that sales for Vans could reach $500 million over the next three to five years.

Following the merger, the VF Corp. will pay Vans shareholders $20.55 per share. On April 26, Vans stock closed at $15.81, with a 52-week high of $16.35.

With sales of more than $5.2 billion, the VF Corp.’s stable of brands includes Lee Sport, The North Face, Nautica, Lee, Wrangler, Earl Jean, Vanity Fair, Lily of France and JanSport. Additionally, the VF Corp. holds licenses to produce sports-related apparel for Nike, Major League Baseball, the National Football League and the National Basketball Association.

Vans, started in 1966, grew in popularity in the early 1980s following the release of the teen flick “Fast Times at Ridgemont High.” In addition to its wholesale business, the company operates 160 retail stores in the United States and Europe. Last month, the company reported a 14.4 percent increase in samestore sales for the quarter ending Feb. 28.

In addition to its retail stores, Vans is involved in a joint venture with Anaheim, Calif.–based Pacific Sunwear of California Inc. Vans Chief Executive Gary Shoenfeld said he has not met with PacSun to discuss the terms of the acquisition but feels the company will be pleased with the deal.

“We have not had the chance to sit down with PacSun and talk with them,” he said. “We have a great relationship with PacSun, and they are a phenomenal company. This is exciting in terms of the potential for our ability to grow Vans’ business with PacSun.”

Vans’ headquarters will remain at its current location after the merger. Eric Wiseman, chairman of VF’s outdoor and sportswear coalitions, will work with company executives and the management team on operations, production planning and the leveraging of VF’s apparel expertise and global presence.

“VF has a compelling strategy to leverage its global resources for their Nautica and North Face brands, and we hope to have the same success [with Vans],” said Craig E. Gosselin, Vans’ senior vice president and general counsel.

Claudia Figueroa