VF Corp. shares were up Wednesday morning after the company announced it had appointed Caroline Brown to its Board of Directors, effective immediately. The company said the appointment came following “constructive engagement” with VF’s shareholders, including Engaged Capital, LLC.
As previously reported by SGB Media, Engaged Capital reported in October that it had built a stake in the owner of Vans, The North Face, Timberland, and Dickies and planned to push for changes, including steep cost cuts, divestitures of non-core assets, and a board overhaul. Many of those initiatives appear to be contained within the Reinvent transformation plan put forth by new VF CEO Bracken Darrell.
Engaged, based in Newport Beach, CA, said former VF Corp. CEO Steve Rendle, who left the company in December 2022, made several strategic errors during his tenure, including reducing autonomy among individual brands, underinvesting in Vans and making the Supreme brand acquisition, which hurt the balance sheet.
Engaged also said VF’s headquarters shift to Denver, CO, “drove massive spend and significant employee turnover.” The hedge fund further noted that under Rendle’s leadership, VF created an “overly complex administrative structure” that “bred a corporate culture burdened by excess bureaucracy, internal politics, and a lack of accountability.”
“We believe VFC’s value destruction is directly attributable to Mr. Rendle’s failed strategy and the Board’s seeming unwillingness to intervene,” the hedge fund said at the time.
Among the changes proposed, Engaged sees an opportunity to make upwards of $300 million in cost cuts through the “elimination of duplicative costs and corporate excess,” review discretionary capital spending, and hire advisors to perform a full review of non-core divestitures. It also wants the company to commit to holding off on acquisitions.
Engaged urged VF to restore brand autonomy and reinvest a portion of savings to accelerate innovation and support growth.
Finally, Engaged called for board changes. The company said, “Existing Board allowed strategic mistakes and corporate excess to continue unchecked, demonstrating the need for new Board members who will prioritize value creation.”
Engaged said in October that if VF implements the proposed changes, shares could jump to a share price of $46 within three years. It is unclear how much of a stake Engaged has taken in VF.
VF also reported it will appoint another independent director to the Board in the near term, mutually agreed with Engaged Capital and will prioritize considering the candidates identified by Engaged Capital. VF expects Brown and the new director will be nominated at its 2024 Annual Meeting of Shareholders, and after the meeting, VF’s Board will comprise 13 directors, including no more than 11 of VF’s current directors.
Brown reportedly has over 30 years of working at global companies in the apparel and fashion industries as an executive, director, investor, and advisor.
From 2019 to 2023, she was a managing director at Closed Loop Partners, a New York-based investment firm focused on developing a circular economy, where she led the company’s fashion business. Previously, Brown was the CEO of Donna Karan International and DKNY from 2015 to 2017, leading a transformation of DKI, elevating product design, modernizing brand identity, overseeing organizational structure realignments and supply chain consolidations. She led the company through the sale from LVMH to G-III Apparel Group.
Before DKI, Brown was president of Carolina Herrera, a luxury fashion house owned by PUIG, where she led product development, brand and international expansion. Before that, she was the U.S. chief executive officer of Akris, Inc., a Swiss-based luxury fashion brand. Brown began her career at Giorgio Armani, spending over a decade in marketing and communications leadership roles.
Brown has served on numerous boards in the fashion industry, including Eileen Fisher, Browzwear, Dimpora, By Rotation, For Days, and others. She is an MIT Sloan Sustainability Initiative Advisory Board member and an advisor to the Martin Trust Center for Entrepreneurship at the MIT Sloan School of Management.
“We are excited to welcome Caroline to the VF Board,” said Richard Carucci, chair of the VF Board. “Caroline is highly respected in the apparel industry, with a proven track record of turning around, scaling and transforming global brands, and her insights will be valuable as the company continues to execute its Reinvent strategy.”
“I’m honored to be joining VF’s Board and look forward to working with management and my fellow directors at this important moment for the company,” said Brown. “Having worked on the leadership and investment sides of the apparel and fashion industry, I recognize the tremendous potential of VF’s portfolio of beloved brands. I believe VF has what it needs to return to strong and sustainable profitable growth, and I look forward to capitalizing on my experience to help the company deliver enhanced value for shareholders over time.”
This appointment is another step in VF’s continuous refreshment of the Board. With this appointment, VF said it has has added four new directors to its Board within the past two years, five following the appointment of the additional director, expanding the Board’s experience in footwear and apparel, retail, design, technology, and sustainability.
Carucci continued, “We appreciate the constructive input provided by Engaged Capital over the past several months and look forward to continuing our dialogue with Engaged Capital and other shareholders as we continue improving the company’s performance.”
Glenn W. Welling, founder and CIO of Engaged Capital, said, “We are excited that the Board has added Caroline Brown, who will bring a wealth of apparel experience to the boardroom. We look forward to continuing to work collaboratively with Caroline and the rest of the Board on the appointment of the Additional Director. We believe these appointments will help support Bracken Darrell and the management team as they lead the turnaround of this iconic portfolio of brands.”
Images courtesy The North Face, Caroline Brown
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For more SGB Media coverage on this story, see below.
EXEC: VF Execs Outline Progress Against Transformation Plan, Brand and Region Review
