Acquiring Eagle Creek further repositions the firm once known for intimates.
Recent news that VF (NYSE:VFC) is selling its intimate apparel lines to Berkshire Hathaway's (NYSE:BRK-A) Fruit of the Loom was just one more example of the company's newfound interest in the great outdoors. Today, the company completed its purchase of Eagle Creek, the latest step in the evolution of the company known at its 1919 inception as Vanity Fair Silk Mills.
VF's acquisition of Eagle Creek will give it one more name in its growing stable of outdoor brands, including Vans, the North Face, JanSport, and Eastpak. Eagle Creek provides "adventure travel gear," such as luggage, backpacks, and other accessories; the press announcement touts Eagle Creek as the originator of the convertible backpack on wheels.
VF says Eagle Creek will add $30 million to 2007 sales and sustain high single-digit sales growth over the next couple of years, although the terms of the acquisition weren't disclosed. Eagle Creek is currently distributed through 1,000 outdoor and luggage retailers, including major player REI.
In VF's announcement that it was bidding adieu to Vanity Fair and its intimate apparel brands, CEO Mackey McDonald said the company was pursuing higher growth and higher margins. Investors certainly can't complain about such goals, since they should translate into increased sales and better profits over the long term. Foolish investors should keep a careful eye on how smoothly the company's ongoing transformation goes in the coming year.
VF recently shed its intimates.
Here's a Fool on the Street on VF.
Take a look at 2006 for VF with this Year in Review.
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Alyce Lomax does not own shares of any of the companies mentioned. Berkshire Hathaway is an Inside Value pick. The Fool's disclosure policy keeps its intimates to itself.