Even non-hikers can get a kick out of Timberlands. Best known for making men's, women's, and kids' footwear, Timberland manufactures hiking boots, boat shoes, sandals, and dress and outdoor casual footwear. The company also makes apparel (outerwear, shirts, pants, socks) and accessories, such as sunglasses, watches, and belts. Its brands include SmartWool, howies, IPATH, and Timberland. Timberland sells its products through about 230 company-owned stores and through department and athletic shops in Asia, Canada, Europe, Latin America, the Middle East, and the US. In 2011 uber apparel maker V.F. Corporation purchased the company for more than $2 billion.
Change in Company Type
Behemoth V.F., which banks on such popular brands as North Face, Vans, Wrangler, and Nautica for revenue, acquired Timberland for $2 billion (or $43 a share) in 2011. Enticed by Timberland's presence overseas and the company's strategic growth during the past decade, V.F. is using the purchase to boost its profitable outdoor and action sports business segment to represent more than half of its total revenue and comprise up to 60% of its business by fiscal 2015. As part of the transaction, V.F. will retain Timberland's headquarters in New Hampshire.
Footwear, Timberland's top product segment, accounts for some 79% of sales. Acquisitions of IPATH (2007) and howies (2006), along with a boost in sales of casual and outdoor performance footwear in recent years, have collectively helped to raise the segment's revenue and offset sales declines of boots and kids' footwear during the economic downturn. Timberland has been slowing shifting its retail format to smaller, more footwear-focused stores. To this end, it has pared down its retail locations by shuttering about 40 of its larger specialty stores in the US, Europe, and Asia and closing several underperforming US factory outlet stores.
The company sells its products through top department and specialty stores as well as Timberland-branded retail stores throughout North America, Europe, Asia, Latin America, South America, South Africa, and the Middle East. About 40% of the company's sales come from North America; however, Timberland has been pushing into global markets, such as Europe and Asia, to diversify its revenue streams. Growth in its European distribution operation and gains in Scandinavia were key to balancing stalled sales across Europe. In Asia, Timberland saw its distribution business gain a foothold, showing some traction in China. The company has continued to expand its brand into China and India and opened its first company-owned retail store in China in 2010.
Overall, a debt-free balance sheet has helped to keep Timberland's head above water during the global economic downturn. During 2010, Timberland saw sales rise among its men's footwear in Europe, North America, and Asia. Revenue for women's and kids' footwear rose, as well, in Europe while the company's Timberland PRO products picked up steam in North America. Timberland apparel has been big in Asia while SmartWool sales of apparel and accessories in North America rose. Licensing revenue, which represents 2% of its business, has risen in recent years due, in part, to the company's licensed Timberland PRO apparel and licensed kids' apparel.
Mergers and Acquisitions
Not only was Timberland's purchase of SmartWool a strategic acquisition for a footwear manufacturer, but buying the sock maker allowed Timberland to expand into international outlets. Timberland bought the Colorado-based maker of wool socks, apparel, and accessories from RAF Industries and the Stripes Group for about $82 million. SmartWool items are sold in outdoor specialty stores in the US and through independent distributors in Canada, Europe, and Asia.