Authentic Brands snaps up Nautica from VF

Dive Brief:

Authentic Brands Group said on Monday that it will acquire Nautica from VF Corporation for an undisclosed amount. The deal is expected to close in the first half of the year, subject to standard customary closing conditions and regulatory approvals, according to a company press release emailed to Retail Dive. VF last month had said it was looking for a buyer for the sporty brand.
ABG will take on Nautica's brand marketing and licensing functions, the company said. Other aspects of the operation will move into Aero OpCo, the operating partner for Aéropostale, which will assume the role of Nautica's core licensee and operating partner, managing the brand's wholesale, 70-plus U.S. retail stores, e-commerce, product development and other functions, according to the release.
This is ABG's largest brand acquisition to date and will expand its portfolio to nearly $7 billion in global retail sales, the company said. The deal is also yet another step in VF's recent effort to right-size its portfolio.

Dive Insight:

Investors in recent years had become impatient with VF Corp.'s status quo and began urging management to add to its stable of brands. That had analysts buzzing about a possible acquisition of Lululemon or Lands' End. But executives pushed back and for the most part, except for its purchase of Williamson-Dickie last year, the company has pared down its portfolio as it sought to balance earnings growth and free cash flow.

In 2016, the company sold its contemporary brands businesses, including 7 for All Mankind, Splendid and Ella Moss, to Israeli apparel company Delta Galil Industries for $120 million and in 2017, VF unloaded its Licensed Sports Group to Fanatics, which included the JanSport brand. Going forward, management said it will build on momentum for the Vans and North Face brands.

Nautica enjoys over $1.2 billion in annual retail sales, 5,000-plus global points of sale, including through 270 freestanding stores and more than 40 licensing partners globally, and acquiring it helps fuel ABG's ongoing global growth strategy, Authentic Brands Group said. "Nautica has significant global presence and incredible consumer reach," ABG CEO Jamie Salter said in a statement. "Through this acquisition we come closer to our goal of achieving $10 billion in global retail sales worldwide by 2020."

Authentic Brands already owns, partly owns or licenses brands including Juicy Couture, Jones New York, Herve Leger, Frederick's of Hollywood, Frye, Adrienne Vittadini and Airwalk, among others. Two years ago, the company also teamed up with landlords to engineer a last-minute rescue of teen apparel retailer Aéropostale.