Lee and Wrangler stock rise during their public debut

admin May 23, 2019

11 2 minutes read

Lee and Wrangler stock rise during their public debut

Kontoor Brands was spun from VF Corp. ( VFC ) The clothing maker who owns the Vans brand of sneakers, Timberland boots and The North Face jackets. Office trades under the ticker symbol "KTB."

Scott Baxter, President and CEO of Kontoor Brands, said in an interview with CNN Business that he is "kicked up and ready to compete" with the recently announced Levi Strauss ( LEVI ) and other apparel companies now that Kontoor Brands is independent.

"The Jeanswear business at VF Corp didn't get the attention we thought they deserved," said Baxter, adding that Kontoor Brands can now focus

Chinese Expansion and Women's Customers

Baxter said while Lee has about the same number Men and women as customers, Wrangler is still seen as more of a men's brand, with only 1[ads1]5% of sales coming from women's jeans. He added that the company has for the first time employed a global designer for Wranger and Lee to help increase sales.

Lee and Wrangler face a hard blow with Levis. And in the VF Corps latest earnings report Onsda y the company said that jeans sales and profits fell in the fourth quarter and for the whole of 2018. So a cynic could claim that VF Corp spun Off Kontoor Brands to shed an after-growth business of his sneakers, boots and active and outerwear.

Lee and Wrangler hope to be a Wall Street jeans that beat like Levi

In addition, recent research and polling data is the company YouGov showed that almost a third of US consumers over the age of 18 said they would be willing to buy something from Levi when they bought clothes, compared to 22% for Wrangler and 17% for Lee.

But Baxter is not worried. He said the company will continue to focus on keeping prices low to attract customers in the US and China. He said Walmart ( WMT ) Kohls ( KSS ) Target (19459004) TGT ) and Alibaba ( BABA ) is among the company's largest retail partners.

Renting jeans may not be the way to go

Baxter added that he is also not too concerned about the emergence of clothing that rents out places like Rent the Runway and Stitch Fix ( SFIX ) offering subscription plans for consumers who may not want to continue buying new shirts, trousers and other clothing.

"Our current consumer does not rent on a large scale," Baxter said. "We are willing to adapt to the market and we can make it faster as an independent company, but this is not a major trend from a denim point of view."

But rentals are clearly growing in popularity. Clothing Dealer Urban Outfitters ( URBN ) announced this week that it plans to launch its own service called Nuuly, while Loft now has one also called Infinitely Loft.

] So what will Kontoor Brands invest in now that the company is vacant from VF Corp?

Baxter suggested that the company be able to diversify into other clothing. He said that is why the company chose the name Kontoor (the more conventional spelling of "contour" was already brand-dependent, he said) instead of using anything with Lee, Wrangler, jeans or denim in the company name.

"When we grow, we want to be more than just a denim company. We want to be a clothing company," he says. "So if we make an acquisition that is not in denim, we are not tied to it with a Lee or Wrangler name. "

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