VF Group Buying Dickies Due To Rising Demand For Work Clothes

According to the world clothing and shoe net, it has Vans, The North Face, Timberland, Lee and so on in August 15th.

The VF group announced the acquisition of Dickies's parent company for $820 million.

For the first time, the group bought a Timeberland six years ago for a large-scale acquisition of 2 billion 300 million.

VF's chief executive, Steve Rendle, said in a statement that buying a century old Williamson-Dickie Mfg family business would double the annual sales of VF's tooling business to $1 billion 700 million.

Last year, Williamson-Dickie's annual revenue was disclosed at $875 million. In the spring of this year, Rendle has said it plans to buy companies that have the potential to achieve annual revenues of $1 billion.

From past experience, VF is very much like a housekeeper, putting some long history brands into the bag and strictly managing them to pport them to a larger scale.

Technology, relying on the advantages of cheap manufacturing costs of large enterprises to make more money.

In 1990s and early twenty-first Century, VF took The North Face and Vans, and bought Timberland in 2011, which immediately doubled the footwear business of VF.

The three brands now contribute more than $5 billion a year to VF.

But there are also some unsuccessful examples. In recent months, VF has been adjusting its portfolios, throwing away a group of luxury brands and a sportswear company.

The Internet sports apparel brand Lucy, which was bought in 2007, was incorporated into The North Face this year. Last year, VF also sold the Cowboy brand 7 For All Mankind.

As an American clothing group that has been listed in 1969, VF has been growing less than expected for 3 consecutive years, which makes shareholders feel anxious.

The performance of The North Face is particularly unsightly, with double-digit declines in the US and the Asia Pacific region. The explanation given by the group is due to the dealer's price reduction strategy and the bankruptcy of two retail partners.

In June this year's earnings conference, 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 push it forward.

Steve Rendle, who took office in January 1st, said in an interview with reporters: "from the way customers interact with us, we can see that there is an oversupply in the outdoor clothing market."

That may be why VF has finally sought a company that works mainly for clothing.

Founded in 1922, Williamson-Dickie Mfg. is located in Texas. Its brands include Dickies, Workrite, Kodiak, Terra and Walls, mainly in sales work clothes.

Williamson-Dickie has more than 400 retail outlets in more than 100 countries, but 66% of it comes from the US market.

"It (Dickies) has a 90% awareness of core consumers, which is a very unique brand."

Rendle answered yesterday's TheStreet question.

Some analysts believe that the acquisition of Williamson-Dickie by VF at this time is related to the domestic employment policy pursued since Trump took office. There will be more workers in the factory, and they will need durable clothing.

This year, the United States has added 191000 manufacturing, mining and construction jobs.

"They are betting that there will be more factories and workers."

"It means more uniforms," says Chen Grazutis, an analyst at Bloomberg Intelligence.

The demand for uniforms is also very heavy in the health care industry. "

Dickies also sells clothing to the service and health care industries. The number of jobs in these industries is also increasing. According to the world clothing and shoe net, the figure may increase to 300 thousand.

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