VF Corp. has entered into an agreement to sell its licensed sports group to Fanatics Inc.
Terms of the transaction were not disclosed.
VF said the deal is expected to close in the second quarter of this year and is subject to customary closing conditions. Separately, Fanatics has a 10-year deal with Under Armour to produce Under Armour-branded field jerseys beginning in 2020.
The business is believed to have annual volume in the $500 million to $550 million range.
Dana Telsey at Telsey Advisory Group said the business includes the Majestic brand, which supplies apparel through licensing agreements with U.S. and international professional sports leagues and teams. Ike Boruchow at Wells Fargo said he expects the streamlining of VF’s portfolio to be viewed “positively” by Wall Street.
The business has been up for sale since March 2016. In addition to being the largest licensee of Harley-Davidson apparel, it also has the licenses for Major League Baseball and the National Basketball Association, among others. Founded in 1947, the divestiture of the business group is a reflection of changes VF sees in the industry and where it wants to position the company for the future.
At VF’s investor day presentation Thursday where executives spoke about key initiatives for the firm’s 2021 strategic growth plan, chief financial officer Scott Roe said, “We are active portfolio managers.” That suggests that VF will make quicker decisions regarding the brands in its portfolio as it evaluates what works and what needs to change.
And in an interview following the presentation, Roe said about some key themes raised by executives during the all-day event: “Our environment is changing [and with] that pace of change, we don’t expect things to miraculously go back to the way they were. We need to adapt, get faster and be more agile.”