Reliance Brands rules out impact on its tie-up with Timberland
US branded clothes label giant VF and outdoor shoes and clothing company Timberland said Monday they would conduct a $2 billion merger to create a $10 billion apparel giant.
"This acquisition will continue the transformation of VF's portfolio, propelling VF's outdoor and action sports businesses to 50 per cent of total revenues," the company's chief executive Eric Wiseman said in a statement.
The purchase, the biggest in the footwear industry in at least five years, will allow VF to get more than half its sales from outdoor and sports clothing. Wiseman is adding Timberland to products including Wrangler jeans and North Face jackets.
The merger, approved by the boards of both companies, is expected to close in the third quarter.
VF, whose brands include include Wrangler, The North Face, Vans, JanSport and Eastpak, is targeting 10 per cent annual sales growth for Timberland.
Timberland, home to its namesake label and brands such as Mountain Athletics and SmartWool, expects 2011 revenue of $1.6 billion, more than half of which is generated internationally. "This will be a winning combination, leveraging VF's international and direct-to-consumer platforms to drive growth in the Timberland and Smartwool brands globally," Wiseman said.
"At the same time, VF will benefit from Timberland's rugged outdoor footwear expertise, international penetration in markets such as Japan, and leadership position in sustainability," he added.
The merger should also help boost profitability by reducing sourcing costs. VF said Timberland should add approximately $700 million to its 2011 sales.
India tie-ups: Reliance Brands, a part of Reliance Industries, said its association with Timberland in India would not be impacted by the global takeover. "Legally, there will be no change in our partnership with Timberland in India. Our agreement with the company continues and the impact of Timberland's buyout by VF Corp would be zero," Reliance Brands president and CEO Darshan Mehta said.
Reliance Brands had signed a distribution agreement with Timberland in 2009 and opened the first outlet in August last year in India. "At present Timberland products are being sold at seven outlets in major cities of India. By the end of this calendar year, we have a plan to open six new outlets," Darshan said.
VF too has a strong presence in India through Arvind Brands and Planet Retail Holdings.
"This acquisition will continue the transformation of VF's portfolio, propelling VF's outdoor and action sports businesses to 50 per cent of total revenues," the company's chief executive Eric Wiseman said in a statement.
The purchase, the biggest in the footwear industry in at least five years, will allow VF to get more than half its sales from outdoor and sports clothing. Wiseman is adding Timberland to products including Wrangler jeans and North Face jackets.
The merger, approved by the boards of both companies, is expected to close in the third quarter.
VF, whose brands include include Wrangler, The North Face, Vans, JanSport and Eastpak, is targeting 10 per cent annual sales growth for Timberland.
Timberland, home to its namesake label and brands such as Mountain Athletics and SmartWool, expects 2011 revenue of $1.6 billion, more than half of which is generated internationally. "This will be a winning combination, leveraging VF's international and direct-to-consumer platforms to drive growth in the Timberland and Smartwool brands globally," Wiseman said.
"At the same time, VF will benefit from Timberland's rugged outdoor footwear expertise, international penetration in markets such as Japan, and leadership position in sustainability," he added.
The merger should also help boost profitability by reducing sourcing costs. VF said Timberland should add approximately $700 million to its 2011 sales.
India tie-ups: Reliance Brands, a part of Reliance Industries, said its association with Timberland in India would not be impacted by the global takeover. "Legally, there will be no change in our partnership with Timberland in India. Our agreement with the company continues and the impact of Timberland's buyout by VF Corp would be zero," Reliance Brands president and CEO Darshan Mehta said.
Reliance Brands had signed a distribution agreement with Timberland in 2009 and opened the first outlet in August last year in India. "At present Timberland products are being sold at seven outlets in major cities of India. By the end of this calendar year, we have a plan to open six new outlets," Darshan said.
VF too has a strong presence in India through Arvind Brands and Planet Retail Holdings.
