North Face Owner VF Needs A New Megadeal. Here’s Why It’s Taking So Long
VF Corp has made its name in the apparel and footwear world by acquiring beloved but once struggling names like The North Face, Vans and Timberland and using its tech, management and manufacturing acumen to turn them into mega-brands. But the company’s financial performance of late has been wanting, with profit per share and revenue growth between 2013 to 2016 falling short of the targets promised to investors. Notably, VF had promised compounded sales growth of 8% a year, but delivered only 6%. On Thursday, the company, led by new CEO Steve Rendle, acknowledged investor frustration with the lack of a major potentially transformative deal, even as it laid out a new multi-year plan through 2021. The new blueprint left many on Wall Street unimpressed: Shares, which had fallen about 28% since a high 19 months ago, fell almost 4% further. The company, which has missed analyst revenue estimates in the last three quarters and posted two consecutive annual revenue declines, according to Bloomberg News, clearly needs a new catalyst. VF told Wall Street to expect a compound annual growth rate through 2021 of 4% to 6%, an ambitious goal in a difficult apparel and footwear market. For the company to hit that mark, the top line could stand the kind of big boost that a new, growing brand could bring. Read more at Fortune.
