Engaged Capital, an activist investor, has recently acquired a stake in VF Corp., the parent company of popular brands like Vans and Supreme. As part of their efforts to improve VF Corp.’s financial situation, Engaged Capital has suggested that the company divest some of its non-core assets in order to reduce its debt, which currently stands at around $7.9 billion. They have also recommended that VF Corp. hire advisers to review potential divestitures and commit to no further acquisitions. Additionally, Engaged Capital has called for the recruitment of new board members.

Upon the announcement of Engaged Capital’s stake in VF Corp., the company’s stock experienced a significant increase, rising by 12% to $18.09 in New York trading on Tuesday. This boost in market value has brought VF Corp.’s total value to $7 billion. As of now, both VF Corp. and Engaged Capital have not provided any comments on the matter.

The apparel industry has faced several challenges in recent years, including supply chain issues and the need to maintain brand relevance. In response to sluggish sales growth, VF Corp. appointed a new CEO in June and has been trying to address these issues. The company has also faced order cancellations from wholesale partners due to cautious consumer demand, further impacting its performance. In an attempt to reduce its debt, VF Corp. reduced its dividend in February.

It remains to be seen how VF Corp. will respond to Engaged Capital’s recommendations and whether they will positively impact the company’s financial situation and overall performance. Investors will be closely watching to see how VF Corp. navigates these challenges in the coming months.

Useful links:
1. VF Corp. Official Website
2. Engaged Capital Official Website