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Engaged Capital has received backing from VF Corp. (NYSE: VFC) founding family in its battle with the owner of brands such as North Face, Vans and Timberland.
Engaged Capital, which holds a 1.3% stake in VF (VFC), won. the support of the descendants of John Barbey, who founded VF in 1899, according to Reuters reports it on Sunday, which quoted Kelly Barbey. Members of the Barbey family now collectively own about 15% of VF.
The Barbey family wants two directors on VF’s 12-member board replaced, Kelly Barbey told Reuters. The family wants Clarence Otis, director since 2004, and Juliana Chugg, director since 2009, removed.
According to Reuters, citing sources familiar with the matter, Engaged Capital has identified people with retail and turnaround experience to run as directors. The deadline for appointing directors expires on Tuesday.
The news comes after Engaged Capital first revealed a stake in the apparel and footwear company in October. Engaged believes VF Corp (VFC) can achieve a stock price of around $40 within three years, according to a copy of a presentation given at an activist investor conference.
Engaged is looking for VFC to make operational improvements, including cost reductions that could be worth 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 seek to renew its board of directors. Some brands VFC may look to offload include Timberland, Dickies, Supreme and Smartwool.
VFC (VFC) announced a strategic review this month, and CEO Bracken Darrell gave no details on which brands might be on the chopping block, but confirmed there are no “sacred cows.”
Activist Legion Partners also has a stake in VF Corp. (VFC) and wants the company to divest brands like Timberland.