Called VF Contemporary Brands, this new “coalition” of VF Corp. will be headed up by Mike Egeck, who previously ran The North Face and VF’s Outdoor Coalition in the USA and the rest of the Americas. He left the group last year to become chief executive of Seven for all Mankind, one of the fastest-growing American brands of jeans, positioned in the luxury segment of the denim market.
Egeck comes back to VF in connection with the group’s purchase of Seven for all Mankind. VF has also acquired Lucy Activewear, a fully vertical American operations launched in 1999 as a pure e-commerce site catering to women’s needs. Besides its lucy.com website, it now owns 50 retail stores as well and generates annual revenues of about $57 million.
Unlike Lucy, Seven for all Mankind, which was founded in 2000, has a presence in Europe and other foreign markets. Sales outside the USA now represent 27 percent of its turnover of around $300 million. The brand plans to open the first of 100-odd stores in Los Angeles next Fall.
VF is paying $775 million for Seven for all Mankind, a price equal to about 9 times its EBITDA. It will pay $110 million for Lucy, which is expected to post a moderate loss this year in spite of strong operating margins.
Because of its more lifestyle-oriented focus, Seven for all Mankind is not being bundled together with two other properties of VF, Wrangler and Lee, in its jeanswear division. Coupled with Lucy, the new Contemporary Brands Coalition will have annual sales of about $350 million, expected to grow by 15-20 percent a year. Other acquisitions are likely in this segment.
Separately, VF has a established a joint venture with Mitsui & Co. for the marketing and distribution of its Napapijri brand in Japan. Based in Tokyo and majority controlled by VF, Napapijri Japan Co. plans to open more free-standing stores and to expand distribution in specialty and department stores.