VF Corp (VFC) saw a significant boost in its stock performance on Tuesday, emerging as the top performer in the S&P 500. An investment firm has reportedly acquired a substantial stake in the parent company of popular brands like The North Face and Vans. This news has sparked optimism among investors, who anticipate cost-cutting measures to be implemented.
Stock Soars, Showing Promise
VFCorp shares experienced a remarkable 14% surge to $18.46 on Tuesday, marking their highest percentage increase since October 28, 2008, when they skyrocketed by 15%, according to Dow Jones Market Data. Despite a 33% decline in share value this year, this recent development has injected renewed confidence into the market.
Investor’s Bold Strategy
Engaged Capital, the activist investor behind this move, plans to propose several changes aimed at optimizing VF Corp’s operations. The most noteworthy suggestion is an ambitious cost-cutting initiative that could amount to over $300 million annually. Sources familiar with the matter suggest that Engaged Capital has secured a place within the company’s top 10 shareholders due to this investment.
Unlocking Potential and Driving Growth
Engaged Capital firmly believes that VF Corp has the potential to triple its share price within three years. Their strategy centers around two key aspects: extensive cost-cutting measures and strategic reinvestment in product innovation at Vans. The Wall Street Journal revealed that Engaged Capital also urges VF Corp to conduct a comprehensive review of all brands, except for the core assets represented by Vans and The North Face.
VF Corp and Engaged Capital have yet to provide comments on this development.