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VF Corp to acquire Timberland for USD 2.3bn
03
Sep '11
VF Corporation, which owns outdoor brands like The North Face and Reef, is acquiring Timberland, known for rugged boots that became a synonym for hip-hop style, for US$ 2.3 billion.

VF Corporation, which has its headquarters in North Carolina in US and is also the owner of Vans footwear and Wrangler Jeans, proposes to fund this acquisition by way of utilizing US$ 500 million in cash from its own capital, US$ 300 million from Timberland's balance sheet, US$ 700 million by raising short-term borrowings that it proposes to repay by close of the current year and US$ 800 million through long-term debts.

Outdoor segment is a preferred choice of apparel labels as it is considered a mode of attracting well-to-do customers whose spending capacity does not get affected by economic volatility, in spite of the fact that most of these buyers never use these apparels near a mountain or a forest.

According to VF's Chief Executive, Eric Wiseman, the new acquisition would boost VF's action and outdoor sportswear sales to 50 percent of its total turnover, making it a US$ 10 billion firm after clubbing VF's expected turnover of US$ 8.4 billion for the current year with Timberland's forecasted revenues of US$ 1.6 billion.

Mr. Wiseman emphasised that VF's China based retail outlets would provide a great opportunity to Timberland to enhance its sales. Analysts hailed VF for its potential of adding new brands to its international supply chain.

Fibre2fashion News Desk - India

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