US apparel giant VF Corp has been given the green light by its board of directors to proceed with plans to spin off its jeans business into a separate publicly traded company that includes brands such as Lee and Wrangler.
First announced in August of last year, the deal will see VF separate its group’s denim and outlet businesses, leaving it to sharpen its focus as a global clothing and footwear powerhouse focused on brands such as The North Face, Timberland and Vans.
The new company – Kontoor Brands Inc – will include the Wrangler, Lee and Rock & Republic brands, and the VF Outlet business.
The group now says the separation will be achieved through the distribution of 100% of the shares of Kontoor Brands to holders of VF common stock. VF shareholders entitled to receive the distribution will receive a book-entry account statement or a credit to their brokerage account reflecting their ownership of Kontoor Brands common stock.
The distribution of Kontoor Brands’ shares is expected to be completed after the market close on 22 May, with VF shareholders receiving one share of Kontoor Brands common stock for every seven shares of VF common stock held at the close of business on the record date of May 10, 2019.
Following the distribution, Kontoor Brands will be an independent, publicly traded company. Kontoor Brands has already received approval for the listing of its common stock on the New York Stock Exchange under the symbol ‘KTB’.
Yesterday, VF said it expects full-year revenue and earnings guidance at Kontoor Brands to be lower year-on-year, as a result of operational actions related to the separation.