Dickies Sold to Bluestar Alliance for $600 Million

Count Dickies as the latest company to be sold to a brand management firm.

On Monday morning, VF Corp. said it will sell its Dickies brand to Bluestar Alliance for $600 million in cash.

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Dickies was founded more than a century ago as a workwear brand and in recent years has expanded its reach into streetwear as well. It is distributed in 55 countries.

“Since 1922, Dickies has provided hard-wearing, long-lasting and comfortable clothes, cementing its status as a storied brand in performance workwear,” said Joseph Gabbay, chief executive officer of Bluestar. “We have followed the brand for many years and have a deep appreciation for its history and legacy, which VF Corp. has successfully begun to rebuild over the past few years. We are committed to supporting the Dickies brand’s growth by leveraging our consumer insights and operational excellence to unlock its full value for all stakeholders.”

VF’s president and CEO Bracken Darrell added: “Dickies is an iconic American workwear brand with a bright future, and I am confident that under Bluestar Alliance’s ownership, it will continue to improve and realize its significant growth potential. As I’ve said before, we continuously evaluate our portfolio and this transaction will enable us to bring our net debt level down and will be accretive to our growth on a pro-forma basis. I want to thank the entire Dickies team for their strong commitment to transforming the brand.”

VF has systematically been paring its portfolio as it works to turn around its business and pay down the debt it accumulated in purchasing Supreme for $2.4 billion in 2020. Last October, it sold Supreme to EssilorLuxottica for $1.5 billion. The company still owns Vans, The North Face and Timberland.

Bracken took over the helm of VF two years ago and immediately made his presence known by changing management at both Vans and The North Face and working to pay down that debt. And it appears to be working, since in the first quarter ended June 28, VF reported overall sales of $1.8 billion with The North Face up 6 percent and Timberland increasing 14 percent. But the company is still in the red, with adjusted operating losses hitting $56 million in the period, down from the $110 million to $125 million the company had forecast.

Bluestar has quietly been building its portfolio. In February, it acquired Palm Angels and it also owns Off-White, Scotch & Soda, Hurley, Tahari, Bebe and several other labels. The company was founded by Gabbay and Ralph Gindi in 2006. It manages a portfolio of more than 500 licensees globally.

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The deal didn’t do much to move the needle on VF’s stock, which was trading down around 1 percent on Monday, but was viewed mainly positively. As Tom Nikic of Needham & Co. wrote in a research note: “We view this development favorably as Dickies has languished in recent years — three straight years of double digit revenue declines. And importantly, it helps VF with their balance sheet cleanup efforts, as the sale price represents about 15 percent of the current net debt balance.”

Anna Andreeva of Piper Sandler said the sale came as a bit of a surprise considering VF moved Dickies headquarters to California from Texas earlier this year to be closer to Vans, but Bluestar approached the company and brought up the idea of the sale. Now that the deal is done, it will help VF pay off the $500 million in notes that are due in March, she wrote, “strengthen the balance sheet and also streamline focus across the organization.”

The Dickies deal is expected to close by the end of this year.

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