Jeans Sales Are Slowing, VF Group Will Sell Its Jeans Brand Wrangler And Lee.

With the revival of tide cards and street clothing, jeans brands are struggling.

According to the Wall Street Journal quoted an unknown person, Vans, The North Face, Lee, Timberland and other more than 30 brands of clothing group VF (Wei Fu Group) are considering stripping their jeans business, or will sell jeans brand Wrangler and Lee.

Up to now, the group has not responded to the news.

Wrangler and Lee are definitely the "old generation" in the American cowboy industry.

The former was founded in 1904 and was founded by cowboy designers. It was known as the "real" jeans brand because of its professional costume for cowboy competitions.

The latter is the "originator" of zipper jeans, and has played a great role in promoting women's jeans.

Relying on the acquisition of these two brands, the group has successfully become one of the leading cowboy manufacturers in the United States and has taken about 25% of the market share in the global jeans market.

Today, however, the group's cowboy business is in a dilemma.

In the latest report released by the group, the group's revenue increased by 23% to $2 billion 790 million over the three months ended June 30th, and net profit rose to $160 million 400 thousand, exceeding analysts' expectations.

However, the growth of performance was mainly driven by outdoor sports departments including Vans, Timberland and The North Face brands, which grew by 19% to 2 billion 14 million US dollars compared with the same period last year, while its denim brand Lee and Wrangler showed a negative growth of 6% and 1% respectively.

"The income of the cowboy Department of the group has been flat for about 10 years, and the sale of this business is conducive to the group buying more developed brands."

Michael Binetti, an analyst at Credit Suisse, said.

In terms of performance, the cowboy business of the Wei Fu Group reached $2 billion 700 million in sales last year, earning about US $421 million 900 thousand. Although the growth trend is negative, it is not entirely "cumbersome".

But with the rise of the "tide culture" of the millennial generation, the growth of tide brand and sports brand has already broken the cowboy.

A steady dream.

The group is obviously aware of this too.

As early as 2014, the group began to make adjustments to its business priorities, such as increasing the marketing investment of its outdoor sports brand The North Face and launching a TV ad for it.

Then, in 2016, the group sold its fashion brands 7 For All Mankind, Splendid and Ella Moss to the Israeli clothing manufacturer Delta Galil, and then sold the sports brand Licensed Sports Group in 2017, while buying sports brand "Licensed" and "Hi".

A fashion executive responsible for the merger and acquisition of the group said: "the group hopes to sell more brands, so any review of the jeans business is likely to be part of the overall view of the company's portfolio, which is likely to sell at $3 billion or higher."

Cowboys from around the world

Look, although jeans are still popular, jeans haven't improved.

According to the observer network, China

Sales of jeans have slowed down in recent years.

At the same time, sales of jeans in Western Europe had dropped by 10% over the same period in 2014, while in the United States, where the origin of jeans was, the decline was 16%.

Compared with traditional jeans, Millennial consumers tend to prefer jeans that are unique in style and innovative in style. They also have higher requirements for the material and elasticity of jeans. In other words, young people are increasingly reluctant to be bound by jeans with regular lines.

For those jeans brands that adhere to the traditional design concept, the lack of variability is undoubtedly a drawback to the development.

Therefore, from a long-term perspective, the jeans brand of the Wei Fu Group does not seem to be able to see a turning point in the growth of its performance.

"I wouldn't be surprised if the group would really divest the jeans business, because the cowboy sector is no longer the core business of the group."

Gilbert W. Harrison, chairman of Harrison of Finland science and technology group, said, "after all, they stripped the performance slump several years ago.

Business, which was once the core of the group. "