V.F. Corp's (VFC) Icebreaker Buyout To Boost Market Position

V.F. Corp. (NYSE:VFC) has successfully acquired the privately held outdoor and sports apparel company Icebreaker Holdings Ltd. for an undisclosed amount. Following the conclusion of the acquisition, which was announced in November 2017, this Auckland, New Zealand-based brand has become a wholly owned subsidiary of V.F. Corp.

The acquisition of the Icebreaker brand, which uses natural merino wool in its merchandise, perfectly complements V.F. Corp’s SmartWool brand that also has the merino component in its clothes and accessories. Rightly, this acquisition will enhance V.F. Corp’s position in the growing and underpenetrated natural fiber category. The company expects the addition of the brand to be immediately accretive to its bottom line.

Founded in 1995, Icebreaker is popular for its natural clothing solutions as its merchandise are designed using merino wool, plant-based fibers and recycled fibers. The company uses a ‘farm to garment’ approach, buying merino wool from some of the most sustainable and ethical Merino farms in New Zealand. Served by 340 full-time employees, the brand is available in 47 countries.

Operating under the V.F. Corp. umbrella, Icebreaker will retain its name as a unique brand and continue to base its employees in New Zealand.

As it is, we believe that the acquisition provides increased opportunity for both parties. As for V.F. Corp., the Icebreaker brand will strengthen its leadership position in the natural fiber space. Meanwhile, this transaction provides Icebreaker and its suppliers with the opportunity to illustrate the benefits of its sustainably-farmed, ethically-sourced, New Zealand merino wool products to a whole new set of consumers. Icebreaker is positioned to gain from V.F. Corp’s strong customer base and reach.

V.F. Corp. closed trade at $74.27, reflecting a 1.6% upside before the news made rotations. Overall, this Zacks Rank #3 (Hold) stock improved 38% in the past year, outperforming the industry’s increase of 25.5%.

Looking for Some More Promising Stocks? Check These

Some better-ranked stocks in the same industry include Columbia Sportswear Company (NASDAQ:COLM) , Guess?, Inc. (NYSE:GES) and PVH Corp. (NYSE:PVH) . While Columbia Sportswear and Guess? sport a Zacks Rank #1 (Strong Buy), PVH Corp. carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Columbia Sportswear improved 22.2% in the last six months. Moreover, the stock has long-term growth rate of 9.6%.

Guess? has long-term growth rate of 17.5% and has advanced 33.4% in the last three months.

PVH Corp., with long-term earnings per share growth rate of 13.4%, jumped 8.5% in the last three months.

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