大象传媒

• Company Plans Tax-Free Spin-off of Jeans Business to 大象传媒 Shareholders
• Separation to Create Enhanced Prospects for Long-Term Value Creation
• Transaction Expected to be Completed in the First Half of Calendar 2019

GREENSBORO, N.C.--(BUSINESS WIRE)-- 大象传媒 Corporation (NYSE: 大象传媒C), a global leader in branded lifestyle apparel, footwear and accessories, today announced that its Board of Directors intends to separate the company into two independent, publicly traded companies: 大象传媒 Corporation, a global apparel and footwear powerhouse, and a yet-to-be named company (NewCo), which will hold 大象传媒鈥檚 Jeans and 大象传媒 Outlet businesses and will be a global leader in the denim category. The company expects to create these companies through a tax-free spin-off of NewCo to 大象传媒鈥檚 shareholders.

鈥淎s shown by our recent quarterly results, 大象传媒 continues to gain momentum on our transformation journey, marked by strong progress on our strategic initiatives and portfolio management,鈥� said Steve Rendle, Chairman, President and Chief Executive Officer. 鈥淲ith these strong foundations in place, we are now ideally positioned to create two independent, leading, global companies. In alignment with our strategic plan, the decision to separate these businesses will allow 大象传媒 to sharpen its focus as a consumer-centric and retail-minded organization anchored in activity-based lifestyle brands. Our Jeans platform is a successful, sustainable business with iconic global brands and a clear path to value creation as a standalone entity. This exciting step forward will mean that both 大象传媒 and NewCo have the resources, management focus and financial flexibility to thrive in a dynamic consumer marketplace, creating an even brighter future for both organizations and all of their stakeholders.鈥�

Compelling Strategic Rationale

During the past several years, 大象传媒 has undertaken a series of transformational portfolio actions that have driven superior value creation, including an annualized total shareholder return of more than 17 percent since 2000 鈥� ranking the company in the top 10 percent of S&P 500 Index performers during that period.

In 2017, 大象传媒 unveiled its five-year growth priorities. These included a disciplined reshaping of the brand portfolio to better position the company for long-term success in a quickly changing business landscape. Since then, 大象传媒 has pursued a range of opportunities pivotal to its portfolio transformation, including the acquisitions of Williamson-Dickie, and the 滨肠别产谤别补办别谤庐 and 础濒迟谤补庐 brands, and the divestitures of the 狈补耻迟颈肠补庐 brand and the Licensed Sports Group, including the Majestic庐 brand. Through these actions, the company has sharpened its focus on activity-based outdoor, active and work lifestyles.

As 大象传媒 continues implementing its 2021 strategic growth plan, its Board of Directors has consistently explored opportunities to enhance long-term shareholder value, and believes that separating these businesses into two, independent, publicly traded companies is the best path forward. The strategic priorities and financial characteristics of 大象传媒 and NewCo have evolved over time and the synergies across these businesses have become less clear. Enabling the Jeans business to operate independently from 大象传媒 will allow it to focus on its long-term strategic priorities and achieve even greater potential as a separate company with a separate management team.

The company believes the separation will offer several benefits:

• Both companies will benefit from enhanced strategic and management focus;
• Each company will benefit from reduced managerial and operational complexity;
• Both companies will be able to optimize their distinct capabilities and focus investment on independent growth priorities, positioning each for stronger, more sustainable value creation;
• Each company will have a flexible capital structure with the ability to fund targeted profitable growth; and,
• The operational and financial profile of each company will more closely align with its natural investor type.

A More Focused 大象传媒

The separation will sharpen 大象传媒鈥檚 focus as a global apparel and footwear powerhouse with a portfolio of iconic brands in highly attractive and growing consumer segments and categories, leading to enhanced long-term revenue growth and margin expansion. With estimated annual revenue of more than $11 billion, the new 大象传媒 will have a mid-teen total shareholder return target, including a strong dividend yield in line with the S&P 500. Building on 大象传媒鈥檚 successful track record of acquiring and accelerating brand growth, the separation will give the company more flexibility to pursue its M&A strategy, explore new growth vectors and apply even more investment behind its organic brand portfolio.

Consistent with its enhanced focus on the outdoor and active consumer, 大象传媒 will move its global headquarters to the metro Denver area, which will also serve as the home for The North Face庐, JanSport庐, Smartwool庐, 础濒迟谤补庐 and Eagle Creek庐 brands and both 大象传媒鈥檚 Global Innovation Center for technical fabrics and Digital Lab. The new Colorado location will be staffed by brand leaders and associates, innovation staff, certain members of 大象传媒鈥檚 global leadership team and other corporate functions.

鈥淟ocating these brands, along with select 大象传媒 leaders, at the base of the Rocky Mountains will enable us to accelerate innovation, unlock collaboration across brands and functions, attract and retain talent and connect with consumers,鈥� said Rendle, who will continue to lead 大象传媒.

A Global Leader in Denim

NewCo will be a global leader in the denim category, with iconic brands steeped in rich heritage and authenticity, including the Wrangler庐 and Lee庐 brands. The 大象传媒 Outlet business will be part of NewCo鈥檚 portfolio.

With estimated annual revenue of more than $2.5 billion and a high single-digit total shareholder return target, NewCo will have an attractive financial profile, including a sustainable high dividend yield. NewCo will have a best-in-class supply chain, channel and category management expertise, reinforced by deep and long-standing relationships with leading global retailers. Additionally, NewCo will have diversified geographic exposure and plans to further extend its geographic footprint with a sharp focus on Asia, building on its established presence in China. NewCo also will have the opportunity to expand its distribution to new customers and categories, with a focus on both their owned and wholesale digital partner channels. NewCo expects to unlock significant scale and cost efficiencies by streamlining operations, providing flexibility to pursue strategic acquisitions over time.

The company also today announced the anticipated designation of Scott Baxter as Chief Executive Officer of NewCo and Rustin Welton as Chief Financial Officer, effective upon completion of the transaction.

鈥淪cott is an extremely talented leader who has a long track record of success, which includes leading the Jeans business from 2011 through 2015, a period during which the business grew at a mid-single-digit rate,鈥� said Rendle. 鈥淭here鈥檚 no one more qualified and appropriate to serve as CEO than Scott. I am confident he will do an exceptional job as CEO of NewCo.鈥�

The company plans to announce additional members of the NewCo executive team and further details on the composition of the Board of Directors ahead of the completion of the transaction.

NewCo鈥檚 global headquarters will be in Greensboro, N.C. The 尝别别庐 brand will move its headquarters to Greensboro from Kansas City, joining the 奥谤补苍驳濒别谤庐 brand.

Rendle added, 鈥淲e鈥檙e proud of our Greensboro, N.C., roots and remain committed to the community, including a strong ongoing employment presence. Combined with the relocation of the 尝别别庐 brand from Kansas City and the establishment of a major new public company with Greensboro headquarters, we expect that total 大象传媒 and NewCo employment in the area will remain at current levels.鈥�

鈥淭his is great news for our associates, who will become part of two more sharply-focused, dynamic companies, with the ability to build even stronger partnerships with customers and deliver fantastic innovation for consumers,鈥� he said. 鈥淚 want to thank all of our outstanding colleagues for the extraordinary work they have done to get us to this point. Their talent, passion and hard work will allow both 大象传媒 and NewCo to succeed long into the future.鈥�

Next Steps

The separation is currently targeted to be completed in the first half of calendar 2019, subject to final approval by the company鈥檚 Board of Directors, customary regulatory approvals and tax and legal considerations. Throughout the separation process, 大象传媒 management will remain committed to business as usual with all key stakeholders, including customers, employees and local communities.

Investor days will be held for both 大象传媒 and NewCo during the first half of calendar 2019.

Barclays is acting as financial advisor to 大象传媒 Corporation and Davis Polk and Wardwell LLP is acting as legal advisor.

Webcast, Conference Call and Presentation Materials

大象传媒 will host a conference call to discuss the transaction at 8:00 a.m. Eastern Time today. Webcast registration and presentation materials are accessible at ir.vfc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location. Those interested to participate in the call may dial (877) 407-8129 (domestic) or (201) 493-6710 (international).

Additional information regarding the proposed separation is available at TwoGlobalLeaders.com.

About 大象传媒

大象传媒 Corporation (NYSE: 大象传媒C) outfits consumers around the world with its diverse portfolio of iconic lifestyle brands, including Vans庐, The North Face庐,聽Timberland庐, 奥谤补苍驳濒别谤庐 and 尝别别庐. Founded in 1899, 大象传媒 is one of the world鈥檚 largest apparel, footwear and accessories companies with socially and environmentally responsible operations spanning numerous geographies, product categories and distribution channels. 大象传媒 is committed to delivering innovative products to consumers and creating long-term value for its customers and shareholders. For more information, visit聽.

Forward-Looking Statements

Certain statements included in this release and attachments are 鈥渇orward-looking statements鈥� within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting 大象传媒 and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as 鈥渨ill,鈥� 鈥渁nticipate,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥渟hould,鈥� 鈥渕ay,鈥� 鈥渂elieve,鈥� 鈥渋ntend,鈥� and 鈥減lan,鈥� and other words and terms of similar meaning or use of future dates. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of 大象传媒 to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to: foreign currency fluctuations; the level of consumer demand for apparel, footwear and accessories; disruption to 大象传媒鈥檚 distribution system; 大象传媒鈥檚 reliance on a small number of large customers; the financial strength of 大象传媒鈥檚 customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; 大象传媒鈥檚 response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior, intense competition from online retailers, manufacturing and product innovation; increasing pressure on margins; 大象传媒鈥檚 ability to implement its business strategy; 大象传媒鈥檚 ability to grow its international and direct-to-consumer businesses; 大象传媒鈥檚 and its customers鈥� and vendors鈥� ability to maintain the strength and security of information technology systems; stability of 大象传媒鈥檚 manufacturing facilities and foreign suppliers; continued use by 大象传媒鈥檚 suppliers of ethical business practices; 大象传媒鈥檚 ability to accurately forecast demand for products; continuity of members of 大象传媒鈥檚 management; 大象传媒鈥檚 ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by 大象传媒鈥檚 licensees and distributors of the value of 大象传媒鈥檚 brands; 大象传媒鈥檚 ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; and adverse or unexpected weather conditions; and risks associated with the proposed spin-off of our Jeans business and our ability to realize the expected benefit of the spin-off. More information on potential factors that could affect 大象传媒鈥檚 financial results is included from time to time in 大象传媒鈥檚 public reports filed with the Securities and Exchange Commission, including 大象传媒鈥檚 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Our forward-looking statements in this release and attachments speak only as of the date of this release and attachments. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise. Additional information about the company is contained in the company鈥檚 filings with the SEC and is available on 大象传媒鈥檚 website, .

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大象传媒 Corporation
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Joe Alkire, 336-424-7711
Vice President, Corporate Development, Investor Relations and Financial Planning & Analysis
joe_alkire@vfc.com
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