VF Exploring Jeans Sale?Wrangler and Lee could be spun off or sold, according to a published report.

[Collection]Is VF Corp. ditching the jeans business? Shares of the company inched up 0.8 percent to $96.29 Friday after The Wall Street Journal cited unnamed sources who said the company was considering selling or spinning off the business. Executives at VF Corp. could not be reached for comment. A deal would separate the company’s biggest drag on revenues, Lee (with sales declines of 6 percent last year) and Wrangler (down 1 percent), from the still-growing businesses like Vans (up 19 percent), The North Face (up 4 percent) and Timberland (up 2 percent). The jeans business is still valuable, posting segment profits of $421.9 million on sales of $2.7 billion last year. But it’s not so valuable that the resources couldn’t be put to better use elsewhere. Michael Binetti, a Credit Suisse analyst, noted that VF’s stock is trading at 18-times earnings before interest, taxes, deprecation and amortization, while companies that are more comparable with the jeans division, Hanesbrands Inc. and Gildan Activewear Inc., trade at 10- to 12-times EBITDA. And so Binetti said a deal could be dilutive in the near term, but positive over the longer run. “Jeans revenues have been [roughly] flat for 10 years, and consume capital (jeans factories) that’d be better deployed for M&A,”

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