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.
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
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
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
BOSS: Can you discuss the apparel opportunity?
SR: Theyve got a very successful apparel platform in Europe with a design center in
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
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.