VF Turns to P&G Vet Bracken Darrell for Next Chapter
The once invulnerable VF Corp. — humbled by declines at the Vans and an uneven start with Supreme — is now betting Bracken Darrell can get the company its mojo back.
Darrell, 60, will take the reins of VF as president and chief executive officer on July 17, putting the fashion newcomer in charge of one of the industry’s leading players, which logged $11.6 billion in revenues last year and also a 34 percent drop in adjusted earnings.
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It’s a big job for the Procter & Gamble and Whirlpool veteran who has spent the last decade leading computer hardware and software company Logitech International.
Darrell will be in charge of overseeing the turnaround of Vans, VF’s largest business, and also walking a fine line at Supreme, which is trying to expand while maintaining its well-honed sense of scarcity. Timberland is also a work in progress, but The North Face is hitting its stride as consumers gravitate toward outdoor brands.
As CEO, he will also have to win back Wall Street, which for years saw VF as a broad-based powerhouse with a steady dividend payment only to watch that thesis unravel.
Benno Dorer, who’s been interim CEO since Steve Rendle left the post abruptly in December, will remain on the board.
It’s a transition that underscores the imprint Procter & Gamble has on the consumer space. The consumer products and beauty giant has produced a long list of top fashion executives including Chip Bergh at Levi Strauss & Co., Patrice Louvet at Ralph Lauren Corp., Fabrizio Freda at the Estée Lauder Cos. Inc. and Toni Belloni at LVMH Moët Hennessy Louis Vuitton. Dorer is also a P&G alum.
At the consumer giant, Darrell was president of Braun globally and, earlier in his career, helped turn around the Old Spice brand.
That’s not direct fashion experience, but he has worked on consumer brands for years, giving him connection points with VF’s own brand leaders. He also has experience leading a publicly traded company — Logitech is listed in Switzerland.
Tom Nikic, an analyst at Wedbush, said: “Maybe finding an executive from the small circle of fashion brand executives out there was not what was needed here, maybe an outside perspective can help turn around the company’s fortunes.”
Investors seemed to be in wait-and-see mode.
Shares of VF inched up 1.1 percent to $19.73 in trading on Wall Street Tuesday, giving the company a market capitalization of $7.7 billion — a far cry from the $40 billion the company was valued at in early 2020.
“Part of the reason why they got such a premium valuation was just that they had this reputation of being good portfolio managers,” Nikic said. “If you have a well-diversified, well-rounded portfolio, then you can get steady consistent growth, which investors were willing to pay up for.”
But the analyst said Vans has been a “problem child,” that Supreme hasn’t worked out the way they thought it would and that Timberland was “volatile.”
“They split off jeanswear into Kontoor [Brands Inc.] and jeanswear has actually held up a lot better than the rest of the portfolio,” he said.
VF still has a sprawling business — based in Denver since 2019 — but for its turnaround to succeed, it needs the $4.2 billion Vans business to work.
Jessica Ramírez, an analyst at Jane Hali & Associates, said Vans needed to move quicker along several fronts after a long stretch of growth.
“It surprised me how far behind they were with digital,” Ramírez said. “The in-store experience is fine, but it could be elevated. They have outdoors product as far as sneakers [with the UltraRange], but I don’t see it having momentum. It’s a good product, but I don’t know what’s taking it so long. Outdoors is where the consumer is spending their dollars, there’s no doubt about it.”
Vans veteran Kevin Bailey returned to the brand last year to lead its turnaround, but the responsibility for it — and everything else at VF — is now going to extend to Darrell.
Richard Carucci, who has been serving as interim chairman since Rendle left and will take the chair position on a permanent basis, said Darrell has “all the attributes to excel.”
“He is a transformational and visionary business leader with a strong track record of performance across multiple industries,” Carucci said. “Throughout his career he has demonstrated an outstanding ability to enhance design capabilities, delight consumers and accelerate revenue growth and margin expansion.”
At Logitech, Darrell worked to move the company into new categories and more than doubled the firm’s revenues while expanding its market capitalization tenfold.
“His broad executive management and deep international experience make him uniquely suited to partner with and guide VF’s executive team and 35,000 talented associates around the world to fuel an exciting new future for the company,” Carucci said. “We are highly confident that under Bracken’s leadership, VF will achieve new levels of success that will make its associates, investors and stakeholders proud.”
According to a regulatory filing, Darrell will receive an annual base salary of $1.3 million and a target annual bonus opportunity of 175 percent of that salary. He will also receive a “annual long-term incentive opportunity of $9 million” and equity awards valued at $3 million to make up for equity he forfeit when he left Logitech.
For his part, Darrell said: “Like millions of people around the world, I love VF’s iconic brands. I’m so impressed by this organization’s sustained ability to keep its portfolio of brands at the forefront of culture over time during its 124-year history. I look forward to working closely with the board, leadership team and the talented associates across VF to build on the initiatives underway to strengthen business performance and drive strong and sustainable growth and shareholder value creation. I can’t wait to get to work.”
Certainly, the new CEO will be plenty busy.
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