The founding family of VF Corp. (NYSE:VFC) is backing activist investor Engaged Capital in its bid to secure board seats at the company, Reuters reported. Engaged Capital took a stake in the leading apparel, footwear, and accessories company in October and announced plans to bolster sales and improve efficiency.
Per the report, Engaged Capital has garnered support from the descendants of John Barbey, the founder of VFC. Members of the Barbey family, currently holding about a 15% stake in the company, are pushing for the replacement of two directors on VFC’s 12-member board. Concurrently, Engaged Capital has been seeking representation on the board.
VFC’s Turnaround Efforts
Notably, VFC has announced measures to reduce costs and bolster operational efficiency amidst declining sales. As part of this initiative, the company eliminated 500 jobs. Additionally, VFC is concentrating on improving its performance in the North American market, revitalizing the Vans brand, and strengthening its balance sheet. However, a challenging U.S. wholesale market continues to remain a drag.
Is VFC a Buy, Sell, or Hold?
VFC stock is down approximately 41% in one year, underperforming the S&P 500’s (SPX) gain of 21.5%. Despite the notable drop in its share price, Wall Street analysts remain sidelined due to its lower sales and free cash flows.
VFC has received three Buy, 14 Hold, and two Sell recommendations for a Hold consensus rating. Analysts’ average price target of $16.56 implies 8.24% upside potential from current levels.
