Blue or black, relaxed or skinny, distressed or classic — jeans have been a fashion staple for decades. While once worn almost exclusively by manual laborers, the durability, versatility, and effortless stylishness of denim have transformed jeans from a symbol of blue-collar labor into an all-encompassing cultural phenomenon.
In recent years, however, the jeans industry has slowed down considerably. The Wall Street Journal reports that denim sales in the United States have declined by nearly 14% over the past four years. At the same time, activewear items, such as yoga pants, are steadily increasing in popularity.
As more consumers begin to shift toward athleisure and outdoor apparel, jeans continue to decline in popularity. While denim duds are probably far from being a fashion trend of the past, the slowing of jean sales has forced many major denim companies to reevaluate their business models and supply chains.
VF Corp., who owns the jean brands Wrangler and Lee as well as activewear brands like North Face and Vans, recently announced plans to spin out their denim brands and focus more on activewear labels. Although the company has certainly reaped the benefits of its many profitable years with the Wrangler and Lee lines, VF Corp. is ready to adapt their business to the changing times and shifting trends.
The company has a long history of acquisitions, encompassing a diverse range of brands in their business model. Currently, almost 41% of VF’s revenue stems from activewear, while 20.4% comes from outdoor apparel. Jean sales comprise 21.7% of their revenue.
Before they announced their plan, the company’s share price was at its highest point on August 10. Three days later, when the conglomerate announced the Wrangler and Lee spinout plan, the stock declined by 5.2%. Still, VF is confident that this move will afford them the flexibility they need to capitalize on the fastest-growing apparel trends.
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