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VF, Nautica Tie Knot And Shoot for $1B Sportswear Business

VF Corp. completed its deal to acquire Nautica Enterprises on Wednesday for a total consideration of roughly $600 million. Here’s what’s next.

“We are going to be very deliberate,” said Wiseman of the firm’s approach to women’s sportswear. “Without question, we see that as an opportunity.”

In addition to running the new sportswear coalition, which includes the Nautica, Earl Jean, John Varvatos and E. Magrath brands, Wiseman will continue as vice president and chairman of VF’s global intimates coalition, which includes the Vanity Fair, Vassarette, Bestform and Lily of France brands. Reporting to him are Chu and Varvatos, among others.

While the firm is expanding some of its offerings into women’s, Earl Jean is already established in the field. E. Magrath is a men’s golf line.

The new coalition is VF’s base for its sportswear expansion.

“Sportswear is half of the apparel industry’s sales,” noted McDonald, highlighting the firm’s opportunity in the category.

In addition to stabilizing the men’s business and getting women’s sportswear rolling, VF’s to-do list includes accelerating growth at Nautica’s other businesses such as men’s and women’s jeans, evaluating opportunities for the smaller Earl Jean and Varvatos businesses and exploring retail opportunities.

Whether or not the Varvatos business, which includes men’s and a forthcoming women’s line, would become a part of VF had been in question before the deal’s completion.

“As of today, we are owned by VF,” Varvatos said following the shareholder meeting. “We will be in discussions, working out the future plans and what it all will mean for us. VF has been very supportive and very excited about Varvatos because it represents a business they don’t have.

“We are moving fast and furious with the women’s line,” he added. “It will be a full collection, from evening to casual sportswear, and including shoes and handbags,” the designer said, of the collection set to launch for fall 2004.

Initially, plans are to include the women’s collection in the existing freestanding Varvatos stores. So far, four are in existence, with two more opening next month, one in Short Hills, N.J., and the other at the Forum Shops at Caesar’s in Las Vegas. The game plan is for worldwide distribution. The firm already has a partner in Japan, Onward Kashimaya, Varvatos noted. Kashimaya recently began distributing the John Varvatos Collection of men’s wear.
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