The company said earlier this year that it would spin off its denim operations. The brands, which will remain in North Carolina, include Lee, Wrangler, Rock & Republic and the VF outlet business. VF’s active lifestyle brands, including The North Face and JanSport, are planning to move to a new home base next year in Denver. Vans will stay in Southern California and Timberland in Stratham, N.H.
According to VF, Kontoor is a “creative variation” of the word “contour” that was inspired by the idea of a perfect fit.
Scott Baxter, chief executive officer of Kontoor, said, “In choosing a name for the new company, it was important for us to select something that serves as an umbrella for our iconic jeanswear brands and provides us with the opportunity to advance our portfolio in the future.”
The separation of the two components is expected to be completed in the first half of 2019. It is still subject to final approval by VF’s board, customary regulatory approvals and tax and legal considerations. VF said more information about Kontoor’s board, executive leadership team, stock symbol and strategic vision will become available before the separation is completed.
VF said the separation will benefit the denim businesses because it will unlock scale and cost efficiencies through the streamlining of operations. Furthermore, the separation will enable the denim company to have the flexibility it needs to pursue strategic investments, as well as grow its international markets.
VF said annual sales for Kontoor’s businesses are estimated at more than $2.5 billion, with free cash flow of $300 million and EBITDA at over $450 million. Kontoor’s dividend yield is projected to be about 5 percent.