North Face owner to buy Timberland for US$2bn

The VF Corporation, which also owns the JanSport and Eastpack luggage brands and denim brand Lee, said outdoor and action sports is one of the fastest growing apparel categories and with Timberland it will account for 50% of VF's revenues.

The acquisition is expected to close in the third quarter of 2011 and will be financed through a combination of cash on hand, commercial paper and term debt.

Eric Wiseman, chairman and chief executive of VF Corporation, said the "rugged outdoor positioning" of the Timberland brand will perfectly complement the "premium, technical positioning" of The North Face brand.

The deal will also include The Timberland Company's Smartwool brand, which makes soft socks and clothing warm but comfortable enough to wear while skiing.

Following the acquisition VF will target 10 per cent annual revenue growth for Timberland by leveraging VF's international platforms, its direct to consumer platform and enhancing the brands' offering and growing the women's business.

VF believes it can substantially increase Timberland's profitability through expense management, reducing sourcing costs through merging supply chain capabilities and the operating disciplines of VF's highly profitable international and direct-to-consumer businesses.

Wiseman said, "This will be a winning combination, leveraging VF's international and direct-to-consumer platforms to drive growth in the Timberland and Smartwool brands globally.

"At the same time, VF will benefit from Timberland's rugged outdoor footwear expertise, international penetration in markets such as Japan, and leadership position in sustainability."

Last month, The Timberland Company aligned itself with sailing in its new global ad campaign, created by Leagas Delaney. The ad will run throughout the summer in Italy and Asia and will launch in the UK early next year.

This article was first published on marketingmagazine.co.uk.