GREENSBORO, N.C. – The clothing company that makes Wrangler and Lee jeans is breaking off its denim division to focus on its fast-growing outdoor and activewear business.
Consumers are swapping out jeans for yoga pants and other active wear, and that can be seen clearly at VF.
In the most recent quarter, revenue from activewear surged 25 per cent and outdoor revenue rose 6 per cent. Revenue from denim increased 3 per cent.
The company expects 6 per cent to 8 per cent revenue growth in its outdoor business this fiscal year and 13 per cent to 14 per cent growth in its active division. Revenue in denim is expected to be flat, VF Corp. said last month.
The company said Monday that it expects the tax-free spin-off of its denim business to generate annual revenue of $2.5 billion.
The yet-to-be-named outdoor and activewear division, which includes The North Face and Timberland, Altra, Icebreaker and Williamson-Dickie, is expected to generate annual revenue of around $11 billion.
That division will move from North Carolina to the Denver area in the next year. The new, company that operates the denim and also its outlet businesses, called NewCo, will remain in Greensboro, North Carolina.
The separation is expected to be completed in the first half of next year. It still needs final approval from board members.