NEW YORK — VF Corp. appears eager to strike a deal.
According to sources, VF, the $5.7 billion apparel firm, is hoping to sew up its deal to buy Nautica Enterprises by July 8, the date of Nautica’s annual meeting where a proxy fight will take place to replace two executives on the eight-member board.
This story first appeared in the June 26, 2003 issue of WWD. Subscribe Today.
As reported, Barington Cos., a private investment group, is looking to unseat two Nautica board members, John Varvatos and Charles Scherer, and replace them with James Mitarontonda and William Fox.
A Nautica spokesman declined comment, while VF officials couldn’t be reached Wednesday.
Barington, which owns 3.1 percent of Nautica, believes the company “has shown poor operating performance” and its board “lacks representation from a sufficient number of independent and experienced directors who will advocate the interests of all stockholders.” If a deal is struck between VF and Nautica before the meeting, said sources, it would completely defuse the whole situation with Barington.
Nautica’s stock closed Wednesday at $12.95, down 1.4 percent in Nasdaq trading.
VF appears to be the front-runner in its attempts to acquire Nautica, a company which has been going through some tough times, especially in its core men’s sportswear division. Its 12,000-square-foot flagship at 50 Rockefeller Plaza continues to perform below expectations, and the company has said it is working closely with the landlord to find ways to reduce fixed costs. It is considering remerchandising the store with home furnishings and more children’s wear.
Currently, the store’s offerings include Nautica men’s sportswear and jeanswear, women’s jeanswear, children’s wear, Nautica Competition swimwear, eyewear and watches. In fact, traffic was sparse Wednesday afternoon at the two-level store, where portions of the women’s spring line were marked down 25 percent.
A Nautica acquisition would bring VF the department store distribution it desires, as well as a large presence in the men’s Collection area, an upscale men’s and women’s jeans label, Earl Jeans, and a top men’s wear designer, John Varvatos.
“It would fill a weak spot in VF’s portfolio — one which they’ve been pursuing for some time, and it plays into their strategic strength. It also buys them a big share in men’s wear,” said Robin Lewis, president of Robin Lewis Inc., a consulting firm and publisher of Robin Reports.
Last December, VF came close to acquiring Calvin Klein Inc., but at the last minute was beat out by Phillips-Van Heusen.