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VF Corp. buys The North Face branded business in China
VF Corp. (NYSE: VFC) said it has acquired The North Face branded business in China from its licensee, Korea-based Youngone Corp. Financial terms were not disclosed.
VF now assumes responsibility for continuing the brand’s rapid growth in China, with the potential for $40 million in revenues within five years, it said. In addition to its wholesale business, The North Face brand also has one freestanding retail store in Beijing.
“The North Face brand continues to be one of VF’s premier growth vehicles. This move will allow us to directly control the brand’s destiny in this dynamic and fast-growing market,” said Karl Heinz Salzburger, VF’s president of Europe, Middle East, Africa and Asia, in a statement.
Frank Cancelloni, general manager of The North Face Asia/Pacific, will oversee the brand’s continued expansion in China. The brand will operate from sales offices in Shanghai, Beijing and Guangzhou.
Gander Mountain Q4 profit drops
Gander Mountain (Nasdaq: GMTN) posted a sharp decline in fourth-quarter earnings as the company booked a hefty charge.
Net income for the quarter fell to $15.3 million, or $0.85 per share, from $22.2 million, or $1.45 per share, in the year-earlier quarter.
The recent period included a pretax charge of $9 million, or $0.50 per share, taken after Chairman David C. Pratt converted certain of his Gander debt holdings into equity. Pratt agreed to buy 5.7 million newly issued shares in December for $50 million. The price was paid with $30 million in cash and $20 million in the cancellation of a $20 million note issued to a Pratt family trust.
Sales increased 16 percent to $326.9 million from $280.8 million, as the company opened new stores in Florida, Texas, Tennessee and Alabama. Same-store sales increased 0.4 percent.
Gander posted a loss for the year of $13.2 million compared to a $13.3 million loss a year earlier. Per-share losses totaled $0.88 in 2006 compared with $0.93 in 2005, as the company increased the number of shares outstanding. Full-year sales climbed to $911.4 million from $804.5 million in 2005.
Stride Rite’s Q1 misses analysts’ mark
Shares of Stride Rite Corp., parent of Saucony and Hind, dropped 10.4 percent on Mar. 29, after the company reported fiscal first-quarter earnings that missed analysts’ expectations.
The company said net income for the quarter rose 34 percent to $11.1 million, or $0.30 per share, from $8.3 million, or $0.22 per share, during the year-ago quarter, which included 6 cents of costs for integrating shoemaker Saucony.
Revenue grew 6 percent to $194.7 million, from $183.4 million a year ago. Same-store sales grew 6.3 percent.
Analysts expected higher earnings of $0.31 per share on revenue of $196.2 million.
The company said the “uneven” retail environment hurt results.
The company reaffirmed its yearly net income earnings guidance of between $1.10 per share and $1.15 per share, excluding integration costs of 2 cents per share. It expects sales growth of 5 percent to 8 percent from $588.2 million, implying sales of $617.6 million to $635.3 million.
Shares fell $1.77, or 10.4 percent, to close at $15.25 on the New York Stock Exchange, where the stock has traded between $11.90 and $18 during the past 52 weeks.
VF Corp. hires Asia president; plans for annual shareholder meeting
VF Corp. (NYSE: VFC) said Aidan O’Meara has been named president of VF Asia Pacific, a new position, effective May 1. He will oversee brands across Asia and the Pacific and be based in Hong Kong.
O’Meara will also be responsible for all licensing, distributor and direct relationships for The North Face, Kipling, Lee, Napapijri, Wrangler, Eastpak and JanSport brands throughout Asia and the Pacific.
O’Meara has been with VF’s international jeans division since joining the company in 1992. Since 2005, O’Meara has served as president of VF’s Jeanswear-International coalition. Karl Heinz Salzburger, president of Europe, Middle East, Africa and Asia, will assume responsibility for VF’s international jeans business until a successor to O’Meara is named.
“VF has aggressive plans to build its business internationally, and Asia represents a huge opportunity for us given our portfolio of impressive brands,” Salzburger said in a statement. Last year, VF raised its target for international revenues as a percent of total revenues from 25 percent to 30 percent.
O’Meara will be based in Hong Kong, and will continue to report to Salzburger.
Separately, VF is asking shareholders to re-elect four members to its board of directors at its annual meeting this year. The is recommending shareholders vote to reappoint Edward Crutchfield, George Fellows, Daniel Hesse and Clarence Otis Jr. to new terms that will run until 2010.
VF is also asking shareholders to approve its choice of PricewaterhouseCoopers LLP as its independent public accounting firm for 2007 and approve a change in its 1996 stock compensation plan.
VF’s annual shareholder meeting will take place April 24 at 10:30 a.m. at the O’Henry Hotel in Greensboro.
Eddie Bauer plans $75 million notes offering
Eddie Bauer Holdings (Nasdaq: EBHI) said it plans to offer about $75 million principal amount of convertible notes due 2014 in a private offering.
The notes will pay interest semiannually beginning on Oct. 1, 2007, Eddie Bauer said, and convert under certain conditions into cash, stock, or a combination of both at an initial conversion rate of 73.8007 shares per $1,000 principal amount of notes, or about $13.55 per share.
The initial conversion price represents a 25 percent premium to the $10.84 per share closing price of Eddie Bauer’s common stock on the Nasdaq Stock Market.
Eddie Bauer said it will use net proceeds of about $71.5 million from the offering to repay a portion of the borrowings outstanding under its term loan agreement.
The note offering is expected to close on or about April 4.
Johnson Outdoors acquires Seemann Sub; receives grant for flood damage
Johnson Outdoors (Nasdaq: JOUT) said it acquired German dive equipment provider Seemann Sub, for an undisclosed amount. The company said the transaction — which closed on April 2 — would boost its footprint in Germany, which it called the No. 1 dive market in Europe.
Seemann, located in Wendelstein, Germany, offers a line of dive equipment and gear. Over the next six months, Johnson will relocate its existing Scubapro and Uwater business to Germany to combine operations. The acquisition is expected to add to Johnson Outdoors’ earnings in 2008.
In other company news: Johnson Outdoors has been awarded $500,000 by New York’s Empire State Flood Recovery Grant Program, established to provide supplemental compensation for businesses impacted by catastrophic flooding in that state last year. The grant will be made in two payments: half upon approval of the application and half upon completion of flood damage remediation efforts.
In June 2006, the company’s manufacturing and administrative facilities located in Binghamton, N.Y., were temporarily shut down due to flooding caused by heavy rains in the Northeast. Production resumed at the facility in August and administrative offices, which had operated out of a temporary location after the flooding, reopened at the facility in January 2007.
Funding for the New York state flood grant program was made available by $12 million in state appropriations and reappropriations to the Empire State Development Corporation. Businesses and organizations located across 20 designated counties in New York state were eligible to receive assistance under the flood grant program.
In its flood grant application last fall, Johnson Outdoors estimated eligible grant expenditures in Binghamton of $7.6 million related to the flood, of which all but $1.2 million was covered by the company’s insurance.
Timberland names acting CFO
The Timberland Company (NYSE: TBL) has appointed John Crimmins as acting CFO. He has served as vice president, corporate controller and chief accounting officer since 2002.
As acting CFO, Crimmins will be responsible for the full range of finance activities including accounting, financial planning and analysis, treasury, and audit, as well as legal and information technology.
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