Shares of VF Corp. were up slightly Tuesday despite the company’s surprise move to go outside the industry and hire Bracken Darrell, former CEO of computer accessories maker Logitech International, as its new CEO. Analysts are hopeful Darrell’s track record for driving growth, executing turnarounds and global expertise offsets his lack of experience in the apparel and footwear space.

On the New York Stock Exchange, VF’s stock closed Tuesday at $19.74, up 23 cents or 1.2 percent. The stock’s 52-week range is between $16.77 and $48.63.

As Switzerland-based Logitech’s CEO for nearly 11 years, Darrell is credited with a turnaround through faster launches of new products and improved design. His accomplishments include:

  • expanding into over 20 new categories,
  • spearheading gaming’s growth into a billion-dollar business,
  • strengthening existing businesses, including desktop, 
  • entering new markets like video conferencing,
  • establishing a strong track record for sustainability, and
  • more than doubled revenues, with Logitech’s market cap growing tenfold.

Darrell’s background also includes working in international leadership as president of the EMEA region at Whirlpool from 2009 to 2012 and as global president of the Braun brand at Procter & Gamble.

Darrell, who joins VF on July 17, replaces Steve Rendle, who retired in December 2022 after nearly six years on the job and about 25 years with the company. Lead independent director Benno Dorer, named interim CEO upon Rendle’s exit, will remain a board member. As part of the announcement, Rick Carucci was named independent board chair after holding the position on an interim basis.

Darrell will take over as VF Corp. recently reported results in its fiscal year ending April 1 that came in well below initial expectations due largely because Vans, its largest brand, had struggled to regain traction. The North Face stood out, with currency-neutral growth ahead 17 percent in its last fiscal year, but its two other largest brands, Dickie’s and Timberland, also showed declines. 

Many of VF’s brands remain challenged amid elevated inventories across the wholesale channel and weakened consumer demand. VF’s other brands include Smartwool, Icebreaker, Altra, Supreme, Eastpak, Jansport, Kipling, and Napapijri.

Jonathan Komp, a Baird analyst, wrote that Darrell brings a “diversified global executive skill set” to VF, noting that he joined Logitech as a first-time CEO new to the technology industry (as an English major) and led the company through a period of “meaningful transition.”

Komp, who has a “Neutral” rating on VF at a $22 price target, said the choice to hire Darrell shows VF’s board “appears to be prioritizing growth” based on Darrell’s track record of expanding revenues and profits at Logitech as well as his extensive global experience, including 65 percent of Logitech’s sales outside the U.S., including 11 percent in China, and his experience running Whirlpool’s EMEA operations. Darrell’s product focus and purpose-led view of sustainability align with VF’s business model.

“Darrell may also bring a new energy, as evidenced by his numerous posts, which reach over 87,000 Linkedin followers,” added Komp. “In our view, these characteristics more than overcome limited apparent experience managing with a constrained balance sheet (LOGI had no financial debt vs. VFC’s current leverage >4X; reducing leverage key near-term component of bulls’ thesis).”

Komp also believes Darrell’s lack of direct footwear or apparel industry experience could be mitigated by selecting an “effective next chief product officer,” a current opening on VF’s C-suite.

Komp wrote, “We believe Darrell’s broader leadership track record outweighs a lack of direct category overlap and limited experience leading with a constrained balance sheet (de-leveraging a key component of bulls’ near-term thesis), although given negative performance for Vans and a challenging environment, we still expect a turnaround to take time to execute.”

Jim Duffy at Stifel, wrote, “Mr. Darrell brings a strong and relevant background with turnaround experience, proven oversight of product innovation, and leadership of global brands and operations. Also impressive is the track record for public company equity value creation at Logitech, where shares went from CHF 6 to CHF 50 during the ten years of his CEO leadership.”

Duffy, who in February upgraded VF Corp. to “Buy” at a $30 price target, noted that while lacking direct experience within footwear and apparel, Darrell’s experience in consumer tech and consumer package goods, as well as his commitment to social responsibility, appears to be a good fit to guide VF. He also noted that the CEO vacancy had been an overhang on VF’s shares, discouraging new investor engagement.

“We continue to see VFC shares as undervalued relative to the cash flows and long-run earnings power and believe risk-reward is asymmetrical to the upside,” said Duffy. “Vans’ inflection in FY2H remains a lynchpin for upside opportunity and the stock. With the overhang from the CEO vacancy resolved with a strong hire, execution to improvement in Vans, and sightlines to cash generation that de-levers the balance sheet, we expect the narrative can change quickly, the valuation framework pivots to P/E, and shares re-rate higher.”

Janine Stichter at BTIG wrote that the resolution to the CEO search removes a key overhang on VF’s stock, and his arrival should help accelerate turnaround plans internally.

“While Mr. Darrell is likely somewhat unknown to consumer investors, we believe he brings a relevant background to VFC in its current stage,” wrote Stichter. “In speaking with the company, they were attracted to Mr. Darrell’s background given several key factors: (1) his experience across various consumer-facing industries, including a focus on design-led initiatives and consumer engagement, (2) his expertise in brand turnarounds, (3) his experience with multi-national companies, (4) his successful tenure as a public company CEO, having driven a 10x increase in market cap at Logitech, and (5) his track record of strong, transformational leadership. Still, we believe the turn at Vans will take time, especially given the current macro backdrop, and look for signs of traction to become more positive.”

Stichter, who has a “Neutral” stock rating on VF, expects Darrell will eventually find ways to elevate rather than overhaul VF’s existing strategy. She wrote, “Though there is still much work ahead as VFC looks to reinvigorate the Vans brand, we believe Benno Dorer has left Mr. Darrell with a cleaner, healthier company to work with going forward, with improved operational discipline and the foundations laid for a turn at Vans. While we don’t expect a major departure from the plan the company already has in place, we do expect Mr. Darrell to take a fresh look at all aspects of the business and likely unearth new opportunities.”

Tom Nikic, who has a “Neutral” rating on VF at a $21 price target, said Darrell “does seem to have a strong track record,” highlighting his success at Logitech and experience in brand turnarounds, including turning around P&G’s Old Spice brand.

Nikic noted that VF’s investor relations team described Darrell as “an energetic leader who galvanizes his teams, and his experience working with global brands was highlighted as a key strong suit.”

Nikic was most concerned with Darrell’s lack of direct exposure to the apparel and footwear sector. He pointed out that although VF’s brands are run by leaders “with a wealth of industry knowledge” that could be complemented by Darrell’s knowledge of brand-building and managing complex global organizations, he noted that the apparel/footwear industry “can be very challenging (long product development cycles, constantly-shifting consumer trends/tastes, etc.).”

“We’re eager to learn more about Mr. Darrell upon taking the seat next month and hopefully get a sense of his vision for the company in the not-too-distant future,” added Nikic. “In the meanwhile, we remain sidelined on VFC shares as we continue to see significant uncertainty at the Vans brand. Mr. Darrell does have a lot on his plate upon taking the job, as turning around Vans is probably a first and foremost priority, while also navigating an increasingly challenging consumer environment and working with CFO Matt Puckett to clean up an over-leveraged balance sheet.”

Photo courtesy Bracken Darrell