Going It Alone: Spin-offs Gain Traction

The language of the big break-up has come to fashion. Matter-of-fact statements about growing apart and brave rationales about how two parties that were once so close should split suddenly seem to be everywhere. VF Corp. started it in August when it decided to consciously uncouple and move the dynamic Vans, The North Face and Timberland to Denver while setting up a separate company, Kontoor, to house the more-staid Lee and Wrangler denim brands. Gap Inc. followed last week, revealing plans to separate the still very promising discount player Old Navy from the much more mixed Gap, Athleta, Banana Republic, Intermix and Hill City. Robert Fisher, Gap’s chairman, said, “It’s clear that Old Navy’s business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward.” Now Barington Capital Group, an activist investing firm led by James Mitarotonda, is pushing for L Brands Inc. to separate the long-suffering Victoria’s Secret from Bath & Body Works, which is going from strength to strength. The big problem is one of perspective. Investors know how to get behind a growth story and they know, sort of, how to discount the risks and opportunities of a turnaround

Follow WWD on Twitter or become a fan on Facebook.

Read More...

from WWDWWD https://ift.tt/2XGzmPR