Timberland Selling For $2.2 Billion

Timberland has continued to perform independently, however the company has been looking to sell for several months now. While they have been able to generate high revenue and continue to perform well regardless of the economic situation, the company feels that with additional help, they would be able to expand further. Timberland currently operates in several countries outside the United States and as a result they have been able to build a strong customer base. Recently it was announced that V.F. Corporation (NYSE:VFC), who currently owns and operates other major clothing companies including Nautica and North Face, is interested in purchasing Timberland. After further discussions between the two companies, it has just been announced that the board of both companies have agreed to sales terms. VF Corporation has agreed to purchase Timberland for $2.2 billion as they are seeking to expand their outdoor and sports business. In addition, both companies have agreed that Timberlands headquarters will remain in Stratham, New Jersey. The state is already home to some of the major design and sporting goods companies and being the area will help them with their competitive outlook. The company will also remain close to New York City which still remains as one of the fashion capitals of the world. Timberland is expected to generate approximately $1.6 billion during this fiscal year and VF Corporation hopes to expand the business by approximately 10% each year. The terms of sale will also benefit the state as the company will be able to keep their New Jersey based employees. In the current economic situation, it has become important to become part of a larger organization as it will help the company diversify their business further.

Though Timberland already has a loyal customer base, they too have been suffering due to the financial situation. However it has been difficult for the company to expand as rapidly as they had hoped due to lack of funding available. VF will certainly be able to provide the company with the additional funding they require, in order to expand further into the US and the global market. The sale is expected to close during the third quarter of the year. Neither company have confirmed if there will be major management changes, as expected with such purchase, however they will release further information once the transaction has been completed. Customers will not be affected during the transition period as the retail chain will continue to operate as normal.