VF Corporation last week announced it would acquire The Timberland Company in a deal valued at approximately $2 billion (see BOSS_1124).  VF will move Timberland into its VF Outdoor and Action Sports coalition, which already includes the Vans, The North Face, Jansport, Reef and Eagle Creek brands, among others. 


This week, The BOSS Report caught up with Steve Rendle, group president of the coalition, to talk about the details of the deal and his vision for the future.

BOSS Goes One-on-One with VF Outdoors Steve Rendle…


BOSS: What attracted VF to the acquisition?
SR: We look at Timberland as a brand that’s got over 30 years of heritage deeply rooted in that rugged New England lifestyle and a brand that is growing and has global reach. Theyve got some really strong platforms, for instance, in Japan, and a good business in Europe. And as we look at their business here in the United States, we feel really good and confident with their current management team and their strategy focusing on some really interesting initiatives like Earthkeepers, the Mountain Lifestyle collection, Timberland Boot Company – theyve got some really good strong initiatives in place from product to how theyre managing their distribution that really give us confidence that this is a good brand to add to our portfolio. And then you look at SmartWool –a brand that’s growing double-digits and has a very dominant position within the outdoor industry when it comes to wool-based product, specifically socks. 
BOSS:How does the Timberland brand particularly complement The North Face?
SR: That’s something we put a lot of thought into. The North Face is a brand that takes you to the top of the mountain or what we like to say, Above the tree line. Then youve got the Timberland brand that really is Below the tree line with that rugged New England outdoor lifestyle. So these are products you use on the mountain but also in your everyday life.  It’s not that top-of-the-mountain positioning but it has a really core outdoor positioning due to its longstanding New England heritage. So we feel we can position the two side-by-side very nicely.  They already sit there today. But we think that through real careful brand management we can come together and really strengthen those complementary positionings and grow those brands really nicely.
BOSS: Timberland had an amazing run in the 90s when it resonated with the hip-hop community but seems to be making a comeback. What do you think about the Timberland brand’s positioning?
SR: When we look at the brand and the management team that Jeff has assembled up there, we really are impressed and respectful of the strategies they have in place in how theyre looking to extend the reach of the brand. With the Classics collection of boots and the hand-BOSSn, theyre being very thoughtful about how theyre distributing those products, very specifically those 6-inch boots. That’s really that iconic Timberland product. And theyve got all these new collections elevating the brand.
BOSS: Which new collections are you most excited about?
SR: Earthkeepers is the one that we talk about a lot. It’s new. It comes from that rugged New England heritage. It’s anchored in sustainability-using green outsole materials with premium leathers. Theyre having great, great growth and are extending the placement of those products globally. Another is the new Mountain Lifestyle collection of light hiking footwear that comes into your everyday life. What’s really interesting to us is the Timberland Pro boot business that they distribute into the workwear marketplace. Weve got a very strong position through our Imagewear coalition selling work apparel into Fedex and TSA and a whole host of different partners. So well look at whether we can help Timberland further their growth there by complementing our apparel with their footwear.
BOSS: Can you discuss the apparel opportunity?
SR: Theyve got a very successful apparel platform in Europe with a design center in London that is doing a marvelous job interpreting that rugged New England lifestyle. But weve had a lot of dialogue with the Timberland organization about their vision for apparel and how do we bring our expertise to enhance their current European offerings as well as how to be very thoughtful on how we can bring that outerwear and apparel into the U.S. market.  Were looking for a global product line that builds on that rugged New England lifestyle across all three regions.

BOSS: Will the Timberland apparel line be aimed at different channels?


SR: It could be different channels and it could be some similar customers. Timberland has a position in the specialty outdoor market. Theyve got good customers in sporting goods and the department stores. So we dont expect a lot of changes in our opinion. Were really in that discovery phase on how we really enable our vision, as well as bring our expertise in how to design, develop and source apparel. But if The North Face is the top-of-the-mountain, technical shell, down fleece and Timberland is more of that below-the-tree line and a little bit less technical but still giving you that protective outdoor product – there’s definitely ways to envision these collections in a very complementary way.


BOSS: What about the direct-to-consumer opportunity? 


SR: They have a strong direct-to-consumer platform in Europe but we see an opportunity to bring our expertise in managing direct-to-consumer. Our four wall opportunity is 30 percent at retail and theirs is in the teens. So it’s about looking at that store performance, looking at where theyre placing stores, the size of the stores, what’s the merchandising plan and strategy to really tell that authentic Timberland story and use these stores to really place both the footwear and apparel assortments in a way that the consumers start to get greater and greater awareness. Weve also got a significant digital online capability. Well scale out our platform to service the Timberland brand as we do with our outdoor brands already.


BOSS:  Can you talk about the SmartWool opportunity? 

SR: The North Face has wool product. But honestly were not a wool expert. What will come with the SmartWool brand is a company that is a leader in understanding wool-based product from their strong penetration in the sock business to what theyre bringing in base layers and as they extend now into more mid-weights and sportswear collections. This is really an iconic brand in the outdoor industry. The opportunity is how we can help them in their ability to source, manage the backend of their business, and really help free up investment dollars to drive behind growing this brand.


BOSS: The two companies have identified $35 million in cost savings by 2012. Where will that come from? 


SR: It’s a little early to talk about that but well look at synergies we can bring as a large operator, especially on the back-end, supply chain systems, financial disciplines, HR, and public-company redundancies. 


BOSS: Can you address potential layoffs?


SR: It’s way too early for that. We dont know enough about who does what within that organization. At the same time, we constantly restate to Timberland’s management as we talk to them, that the people — the expertise that they bring — is the value of the brand that they bring to VF.


BOSS: Is Jeff Swartz staying on?


SR: That’s in discussion. He’s a real visionary leader for that brand and were talking to him about that right now.


BOSS: Will you still be seeking out acquisitions in the outdoor and action sports space while absorbing Timberland?


SR: Weve got some work to do over the next few weeks but honestly if the right acquisition came up, we would absolutely look at it.