The owner of two of America’s most historic denim brands wants out of the jeans business.
VF Corp, which owns a large stable of brands including the Lee and Wrangler denim labels, has announced it will spin off its denim division into a separate, publicly traded company. The company’s plan is to focus on its roster of “activity-based lifestyle brands,” including Vans, The North Face, Timberland, Reef, Icebreaker, and several others.
Companies tend to split off brands if they’re a drag on the finances and time of the parent. Though VF Corp said that its denim business, which also contains Rock & Republic and Riders by Lee, is successful, that segment has been its weakest. In July, when it gave its sales forecast for the year, it expected its denim business to show no growth at all. It expects outdoor wear, meanwhile, to grow 6% to 8%, active to rise 13% to 14%, and its work segment to increase more than 35%.
The decision also highlights the pressures on denim more generally in an era when shoppers are looking for comfortable, functional clothes to match active lifestyles—even if they aren’t always using those clothes and shoes for the gym. Though sales of activewear have slowed, they continue to outpace (pdf) the rest of the apparel market.
Denim has been particularly squeezed as shoppers stock their closets with activewear. The Wall Street Journal, which first reported news of VF Corp’s plan (paywall), notes that total jeans sales in the US fell from $18.8 billion in 2013 to $16.2 billion in 2017, according to data from market-research firm Euromonitor. Some brands, such as Levi’s, are finding ways to adapt, but many others aren’t.
Denim’s very identity is in flux. Jeans aren’t the unquestioned default for casual wear any longer, thanks to the growth of athleisure. And though they started as durable, rugged workwear, many jeans today are only suitable for work that takes place in an office.
VF Corp hinted at this unclear position in its press release, when it referred to its recent spree of buying up active and outdoor brands, such as Icebreaker, and workwear labels like Dickies. “Through these actions, the company has sharpened its focus on activity-based outdoor, active and work lifestyles,” it stated. Lee and Wrangler jeans, created for workers and cowboys, don’t fit neatly into any of these categories anymore.