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Engaged Capital secured support from VF Corp. (NYSE:HRV) founding family in its battle with the owner of brands such as North Face, Vans and Timberland.
Engaged Capital, which owns a 1.3% stake in VF (HRV), won the support of the descendants of John Barbey, founder of VF in 1899, according to a Reuters report Sunday, which quoted Kelly Barbey. Members of the Barbey family now collectively own around 15% of VF.
The Barbey family wants two directors replaced on VF’s 12-member board, Kelly Barbey told Reuters. The family wants Clarence Otis, director since 2004, and Juliana Chugg, director since 2009, removed from their positions.
Engaged Capital has identified people with retail and turnaround expertise to serve as director candidates, according to Reuters, which cited sources familiar with the matter. The deadline to appoint directors is Tuesday.
The news comes after Engaged Capital disclosed for the first time a participation in the clothing and footwear business in October. Committed estimates VF Corp (HRV) can reach a stock price of $40 in three years, according to a copy of a presentation presented at an activist investor conference.
Engaged seeks VFC to make operational improvements, including reducing costs that could amount to more than $300 million annually. The activist also wants the company to conduct a strategic review of its non-core assets and real estate and possibly consider refreshing its board of directors. Some brands VFC might consider getting rid of include Timberland, Dickies, Supreme and Smartwool.
HRV (HRV) announced a strategic review this month and CEO Bracken Darrell didn’t provide details on which brands might be on the chopping block, but he did confirm there were some “no sacred cows.”
Activist Legion Partners also owns a stake in VF Corp.HRV) and wants the company sell off brands such as Timberland.
