Corrected: Engaged Capital gains support of VF heir to shake up North Face owner
12/02/2024 24:11
(Corrects Feb. 11 story throughout to show Kelly Barbey does
not speak for his family)
By Svea Herbst-Bayliss
Feb 11 (Reuters) -
A member of the founding family behind VF Corp VFC.N is
backing activist investor Engaged Capital's push for board seats
and faster change at the struggling owner of the North Face,
Vans and Timberland brands.
Kelly Barbey, the great-grandson of John Barbey, who
founded VF in 1899, told Reuters he wants two directors on VF's
12-member board replaced and that he is backing Engaged Capital
in its efforts to achieve this.
Barbey said he wants Clarence Otis and Juliana Chugg,
directors since 2004 and 2009, respectively, replaced for
failing to respond to VF's challenges over the last few years.
VF shares have lost 35% of their value in the last 12
months, deeply underperforming a 16% drop in the S&P 500
Apparel, Accessories & Luxury Goods index, as the company
struggles to strengthen the appeal of its brands to consumers as
they cut discretionary spending.
Engaged Capital, run by hedge fund veteran Glenn Welling,
has already successfully pressed VF to cut costs and explore
strategic alternatives, including selling its non core brands.
The company recently announced some changes.
It is unclear whether Barbey's support of Engaged
Capital, which has a 1.3% stake in VF, is anything but symbolic.
Much of the Barbey family's 15% stake in VF lies with two
entities that have so far aligned with the company's board in
how they vote their shares.
One is a PNC trust holding a 10% stake in VF where Otis
and Chugg serve as co-trustees and can block any effort to use
that stake to remove them. The second entity, holding a 5%
stake, is controlled by his cousin Todd Barbey, who has so far
supported the board.
Kelly Barbey declined to disclose how many VF shares he
holds and what entity they sit in.
"Engaged Capital must urgently attain the Board member
changes requested, with the implementation of the priorities of
its assessment. Public shareholders and the Barbey trust
beneficiaries depend upon them," Barbey said. He declined to
name any trust beneficiaries that support his cause.
A VF representative declined to comment. Other members
of the Barbey family could not be reached.
The hedge fund has identified people with retail sector and
turnaround expertise to serve as director candidates, sources
familiar with the matter said. The deadline to nominate
directors is on Tuesday.
VF missed analysts' expectations in its third-quarter
results last week and said it had begun an in-depth strategic
review of its Global Packs business, including brands such as
Kipling and JanSport. The company reported an adjusted profit of
57 cents per share, missing LSEG estimates of 77 cents, amid
falling revenue and operating margins.
The company is in the throws of an attempted turnaround
embarked on by CEO Bracken Darrell, who took the position in
July 2023 and previously led computer peripherals maker Logitech
International LOGN.S . He has laid off staff and cut costs.
Legion Partners Asset Management, another activist hedge
fund, has also amassed a stake in VF.
(Reporting by Svea Herbst-Bayliss in Rhode Island; Editing by
Diane Craft and Marguerita Choy)
((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))