VF Corp. will pocket $600 million when its all-cash deal to sell Dickies to Bluestar Alliance closes this year, the company announced Monday.
That’s less than the $820 million VF paid for the business in 2017, but will help as VF looks to aggressively pay down its debt and right-size its brand portfolio. The flagging workwear brand was increasingly out of step within the broader portfolio as more attention in quarterly earnings calls was focused on the wins or strategies of VF’s largest businesses.
As VF has sought to move quickly and turn around one of its star brands in Vans, little attention has been given to Dickies. The workwear brand had sales of $542.1 million in VF’s fiscal year ended in March. That compares to sales of $618.4 million in the prior year.
Funneling attention into the smaller line didn’t seem like a long-term strategy for VF with its hands already full in improving the $2.3 billion Vans business. The Costa Mesa footwear company is the company’s second largest after The North Face, which had sales of $3.7 billion in the recently ended fiscal year. Vans had at one time been VF’s largest division, but a miss on the assortment and marketing has dealt it blows in recent years.
VF President and CEO Bracken Darrell said Dickies under Bluestar Alliance could “realize its significant growth potential.”
“As I’ve said before, we continuously evaluate our portfolio and this transaction will enable us to bring our net debt level down and will be accretive to our growth on a pro-forma basis,” Darrell said.
Last year, VF sold Supreme for $1.5 billion to EssilorLuxottica in another all-cash deal.
The Dickies sale is expected to close by the end of this year.
No Plans
Darrell joined VF in 2023 and was brought on to right the business, which had been hit hard most recently by Covid. However, its largest business in Vans was also ailing after a number of false starts at a turnaround.
Since then, much of the public-facing strategizing has been centered around what to do about Vans. Significantly less attention went to Dickies, the workwear brand that is the daily go-to for many uniforms.
More recently, there was interest in carving out a lifestyle path for Dickies and pushing it into a fashion conversation that could have meant a contender to Carhartt’s directional fashion label Work in Progress (WIP). However, with so many resources being devoted to other VF brands, Dickies got lost in the noise.
In fact, 120 workers lost their jobs when VF made the decision to consolidate Dickies’ staff from Fort Worth, Texas to Vans’ Costa Mesa headquarters in a move expected to be completed by May. It’s unclear how much of the remaining Dickies staff will be retained once Bluestar’s purchase of it is completed.
“We have followed the brand for many years and have a deep appreciation for its history and legacy, which VF Corp. has successfully begun to rebuild over the past few years,” Bluestar Alliance CEO Joseph Gabbay said. “We are committed to supporting the Dickies brand’s growth by leveraging our consumer insights and operational excellence to unlock its full value for all stakeholders.”
The Brand Management Business
For Bluestar, Dickies adds to its expanding brand portfolio.
The company, which Gabbay launched with Ralph Gindi in 2006, has built itself into a brand management firm with its business lines generating over $10 billion in retail sales globally.
The company owns Off-White, Scotch & Soda, Hurley, Bebe, Brookstone, Tahari and Kensie among several other brands.
It bought Palm Angels in February as it added to Bluestar’s growing bid to accumulate more of what it called “high-end streetwear and luxury fashion” labels.
Bluestar didn’t offer hints on what its plans for Dickies are and whether it would move the company’s presence back to Texas or keep a satellite office in Orange County. Bluestar’s corporate offices are in New York.
Be First to Comment