The Greensboro, N.C.-based firm, already a behemoth in jeans and innerwear, got a jump-start Wednesday when Nautica Enterprises Inc. shareholders approved its merger into VF at a special meeting at the firm’s headquarters, completing the deal that carries a total consideration of about $600 million.
In time, 25 percent of VF’s sales could be derived from sportswear, said chairman and chief executive officer Mackey McDonald. Nautica brings with it an established men’s business, so much of that growth will come from women’s sportswear.
Last year, VF produced sales of $5.08 billion, while Nautica raked in $693.7 million. Sportswear now makes up about 10 percent of VF’s business.
“It’s been an objective of VF’s for some time to enter the sportswear category,” said McDonald. “We weren’t in the market for a brand. We were in the market for a leadership team with a strong brand and that’s what we have in Nautica.”
VF will approach the Nautica business with a multibranded, multichannel distribution channel strategy in mind.
McDonald, along with Nautica’s founder, David Chu, and Eric Wiseman, who has been named chairman of VF’s new sportswear coalition, discussed their plans during an interview at Nautica’s 57th Street headquarters in New York.
Harvey Sanders, who had been chairman, president and ceo of Nautica, will leave the company. Chu, who is now ceo of Nautica’s branded business, said his goal is to “build this business into a really global brand.”
His first task, though, will be to stabilize Nautica’s men’s business. Key to that will be reasserting the brand’s classic though modern positioning, which has lost its focus as of late.
By signing on with VF, Nautica, which is more of a design business, received a boost on the operations and logistical side. As Chu noted, the deal “adds a little bit of rocket fuel to the business.”
Nautica women’s sportswear, though, will take some time to put together and would bow, at the earliest, in 2005.