© Reuters. Timberland shoes are seen in a shop in Rome, Italy, March 30, 2016. REUTERS/Max Rossi/File Photo
By Svea Herbst-Bayliss
(Reuters) – Activist investor Engaged Capital has the backing of the founding family of VF Corp (NYSE:) in its push for board seats and faster change at the struggling owner of the North Face, Vans and Timberland brands, one of the heirs told Reuters.
Engaged Capital, which has a 1.3% stake in VF, has won the support of descendants of John Barbey, who founded VF in 1899, Kelly Barbey, said. The Barbey family members now collectively own about 15% of VF.
The Barbey family wants two directors on VF’s 12-member board replaced, Kelly Barbey said. Independently, Engaged Capital has been pushing for board representation since disclosing its position in the company late last year.
Barbey said the family is targeting Clarence Otis, a director since 2004, and Juliana Chugg, a director since 2009, blaming them for failing to respond to VF’s challenges over the last few years.
VF shares have lost 42% of their value in the last 12 months, deeply underperforming a 16% drop in the Apparel, Accessories & Luxury Goods index, as the company struggles to strengthen the appeal of its brands to consumers as they cut discretionary spending.
Engaged Capital, run by hedge fund veteran Glenn Welling, has already successfully pressed VF to cut costs and explore strategic alternatives, including selling its non core brands. The company recently announced some changes.
The hedge fund has identified people with retail sector and turnaround expertise to serve as director candidates, sources familiar with the matter said. The deadline to nominate directors is on Tuesday.
While Engaged Capital has been pushing for changes at VF since October, support from the Barbey family had not been previously reported. It is unclear how VF will respond to the family’s demands.
A VF representative did not immediately respond to a request for comment.
“Engaged Capital must urgently attain the Board member changes requested, with the implementation of the priorities of its assessment. Public shareholders and the Barbey trust beneficiaries depend upon them,” Barbey said.
Barbey expressed concern about a lack of urgency at the board level and said directors are “so entrenched and bureaucratic there is a reduced ability to communicate the vision and ideas needed to speed a quick turnaround.”
VF missed analysts’ expectations in its third-quarter results last week and said it had begun an in-depth strategic review of its Global Packs business, including brands such as Kipling and JanSport. The company reported an adjusted profit of 57 cents per share, missing LSEG estimates of 77 cents, amid falling revenue and operating margins.
The company is in the throws of an attempted turnaround embarked on by CEO Bracken Darrell, who took the position in July 2023 and previously led computer peripherals maker Logitech (NASDAQ:) International. He has laid off staff and cut costs.
Legion Partners Asset Management, another activist hedge fund, has also amassed a stake in VF.
