Exclusive-Engaged Capital secures support from VF heirs to shake up North Face owner By Reuters

© Reuters. Timberland shoes can be seen at a store in Rome, Italy on March 30, 2016. REUTERS/Max Rossi/File Photo

Svea Herbst-Bayliss

(Reuters) – Activist investor Engaged Capital has the backing of the founding family of VF Corp (NYSE:) in securing a board seat and pushing for a rapid transformation of the struggling owners of The North Face, Vans and Timberland brands, among its heirs. One person said: Reuters.

Engaged Capital, which holds a 1.3% stake in VF, has the support of descendants of John Barbey, who founded VF in 1899, Kelly Barbey said. Barbey family members currently jointly own about 15% of VF.

The Barbey family wants to replace two directors on VF’s 12-member board, Kelly Barbey said. Independently, Engaged Capital has been pushing for board representation since disclosing its position at the company late last year.

Barbey said the family was targeting Clarence Otis, a board member since 2004, and Juliana Chugg, a board member since 2009, accusing them of failing to respond to VF’s challenges over the past few years.

VF shares have lost 42% of their value over the past 12 months, significantly underperforming the 16% decline in the Clothing, Accessories and Luxury Index as the company struggles to strengthen its brand’s appeal to consumers while cutting back on discretionary spending.

Engaged Capital, run by hedge fund veteran Glenn Welling, has already successfully asked VF to explore strategic alternatives, including cutting costs and selling off non-core brands. The company recently announced several changes.

The hedge fund has nominated people with retail sector and turnaround expertise for director positions, according to people familiar with the matter. The deadline for director nominations is Tuesday.

Engaged Capital has been pushing for change at VF since October, but the Barbey family’s support has not previously been reported. It is unclear how VF will respond to the family’s needs.

VF representatives did not immediately respond to a request for comment.

“Engaged Capital must urgently achieve the requested board membership changes by implementing valuation priorities, which public shareholders and Barbey Trust beneficiaries rely on,” Barbey said.

Barbey expressed concern about the lack of urgency at board level and said directors were “too entrenched and bureaucratic and lacked the ability to communicate the vision and ideas needed to accelerate the pace of a rapid turnaround.”

VF said last week it had beaten analysts’ expectations with its third-quarter results and had begun a deep strategic review of its global packs business, which includes brands such as Kipling and JanSport. The company reported adjusted earnings of 57 cents per share, missing LSEG estimates of 77 cents, due to lower sales and operating margins.

The company is facing a turnaround attempt launched by CEO Bracken Darrell, who took over as CEO in July 2023 and previously led computer peripherals maker Logitech (NASDAQ:) International. He laid off employees and cut costs.

Legion Partners Asset Management, another activist hedge fund, has also accumulated a stake in VF.