Wall Street and the business media were all abuzz last week after the Wall Street Journal published a story suggesting that The Timberland Company was exploring strategic options for the company, including a potential sale. Timberland is reportedly valued at nearly $2 billion. The Journal, Reuters, and others cited “people familiar with the matter” as their source for the information. WSJ said that Goldman Sachs had been called in to assist the company with the sale and Timberland has been reaching out to potential buyers. The Swartz family, founders of the company, controls 70% of the voting power and 100% of the class B shares. The Times of London also fueled the speculation writing that, “The company is believed to have held 'preliminary and informal' talks with at least three potential buyers, all of which were private equity firms.” Timberland officials contacted by Sports Executive Weekly declined to comment on what were described as “rumors.”

Any action to sell the company would appear to run counter to recent moves the company has made to get itself back on track. TBL acquired the GoLite brand name in June of this year and is releasing a new line of outdoor footwear under that name this coming spring. And they closed on the acquisition of SmartWool last year. Both moves, along with the creation of the Mion brand, represented a direction TBL was taking to establish itself more firmly in the outdoor specialty market. SEW has also learned that the company is making a number of internal moves to right size the company and position talent to fix the misses that have plagued it over the last two years. TBL has apparently not employed any of the slash and burn moves usually associated with the radical cost-cutting often required in a lead-up to a sale.

Most of the sale speculation centered around initial conversations the Swartz family reportedly had with a few private equity firms to explore their options. With that market flush with cash, there are certainly more than a few firms that could handle a deal this size. The opportunity could also be of strategic interest to Nike, Inc. or VF Corporation to help establish a solid position in the outdoor and work/duty category. Wolverine World Wide was also mentioned by some industry watchers as a potential suitor, but WWW already has solid brands and products in most of the categories where Timberland plays, except the urban business where TBL is suffering most of its pain today.

Timberland President and CEO Jeffrey Swartz has been taking a lot of heat from analysts of late for the company’s high profile commitment to giving back and doing good. Timberland prides itself as a leader in giving back to the community and is often on the front line on issues regarding sustainability and the environment. The company is also a perennial recipient in best places to work awards by magazines.


>>> Perhaps the idea of going private would enable the company to continue this work without Wall Street watching over its shoulder. Perhaps a sale would enable the Swartz family to spend its time and money investing in its own interests. Or perhaps its all what the company says it is — rumors…