Vans, North Face owner VF Corp shares jump after activist investor builds stake

Activist investment firm Engaged Capital has taken a stake in VF Corp., owner of Vans and The North Face brands, and is pushing for cost cuts and changes to the board.

Shares of VF Corp jumped roughly 14% following the news, trading at over $18. The stock is down more than 30% so far this year. Engaged said shares of VF Corp. could jump to a share price of $46 within three years if proposed changes are implemented.

It is unclear exactly how much of a stake Engaged has taken in VF Corp.

Engaged said former VF Corp. CEO Steve Rendle, who abruptly left the company late last year, made a series of strategic errors during his tenure. Those, according to Engaged, include reduced autonomy among individual brands, underinvestment in Vans, and the Supreme brand acquisition, which hurt the balance sheet. Rendle was appointed CEO in early 2017 and became chairman later that year.

“We believe VFC’s value destruction is directly attributable to Mr. Rendle’s failed strategy and the Board’s seeming unwillingness to intervene,” the firm said.

Engaged is pushing for a number of sweeping changes, namely an upwards of $300 million in cost cuts through “elimination of duplicative costs and corporate excess.” It also wants the company to commit to holding off on acquisitions.

The firm is, however, supportive of current CEO Bracken Darrell, who took the position in July. “Mr. Darrell appears to have the transformation experience VFC urgently requires,” Engaged said.

VF Corp. said it is aware of Engaged’s comments and investment.

“”VF has globally recognized and iconic brands and best-in-class talent. VF’s Board and leadership team, including our recently appointed CEO Bracken Darrell, are taking immediate and decisive actions to strengthen the company’s position and return VF to strong, sustainable, and profitable growth in the interests of all our shareholders,” the company said.