[Integrated] Vans parent company VF Group acquires Dickies due to rising demand for work clothes

On August 15, VF Group, which owns brands such as Vans, The North Face, Timberland and Lee, announced the acquisition of Dickies’ parent company for US$820 million. This was the first time since the VF Group purchased Timeberland for US$2.3 billion six years ago. The acquisition.

Steve Rendle, CEO of VF, said in a statement that buying a family owned 100-year-old Williamson-Dickie Mfg will double VF’s annual sales of the tooling business to $1.7 billion. Williamson-Dickie’s annual income was disclosed last year at $875 million, and this spring, Rendle said that it plans to acquire companies that have the potential to achieve $1 billion in annual revenue.

Looking at past resumes, VF is very much like a steward. It takes some long-established brands into the bag and rigorously manages it. It transports more voluminous garment technology and relies on the advantages of a huge company's low manufacturing cost to make more money. . In the 1990s and early 2000s, VF took The North Face and Vans, and in 2011 it acquired Timberland, which immediately doubled the footwear business of VF. These three brands currently contribute more than $5 billion in annual revenue for VF.

However, there are some unsuccessful examples. In recent months, VF has been adjusting its investment portfolio, throwing off a number of luxury brands and a sportswear company. Lucy, the Internet sportswear brand acquired in 2007, was incorporated into The North Face this year. Last year, VF also sold the 7 For All Mankind jeans brand.

As an American apparel group that has been listed since 1969, VF has failed to meet expectations for three consecutive years, which makes shareholders feel very anxious. The performance of The North Face was particularly ugly, with double-digit declines in both the United States and the Asia-Pacific region. The explanation given by the group was due to the dealer’s price cut strategy and the bankruptcy of the two retail partners. At the financial report meeting in June this year, VF promised to push the compound annual growth rate to 4%-6% in 2021, but there is no doubt that it needs a new and growing brand to be a stronger driving force.

Steve Rendle, who just took office on January 1st, said in an interview with Fortune: "From the way customers interact with us, we see that there is an oversupply in the outdoor apparel market." That may also be why VF eventually sought A company that specializes in garments.

Founded in 1922, Williamson-Dickie Mfg. is located in Texas. Its brands include Dickies, Workrite, Kodiak, Terra, and Walls. They mainly sell work clothes. Williamson-Dickie has more than 400 retail stores in more than 100 countries, but 66% of its revenue comes from the US market.

"It has 90% awareness of core consumers. It's a very unique brand," Rendle said yesterday in response to TheStreet's question.

Some analysts believe that VF’s acquisition of Williamson-Dickie is related to the domestic employment policy that has been pursued since Trump took office. There will be more workers in the factory and they will need durable garments. This year, 191,000 new jobs in the manufacturing, mining, and construction industries were added to the United States.

"They are betting that there will be more factories and employees." Chen Grazutis, an analyst at Bloomberg Intelligence, said: "This means more uniforms. The health care industry also has a heavy demand for uniforms." Dickies also sells clothing to In the service and healthcare industries, the number of people employed in these industries is also increasing. According to the “New York Times” report, the increase may reach 300,000.