Exhibit 99.1
[GRAPHIC OMITTED (COMPANY LOGO)]
FOR IMMEDIATE RELEASE
VF TO ACQUIRE NAUTICA ENTERPRISES, INC. FOR $17.00 PER SHARE IN CASH
Greensboro, NC (July 7, 2003) - VF Corporation (NYSE: VFC), the world's largest
apparel company, announced that it has signed a definitive merger agreement to
acquire Nautica Enterprises, Inc. (NASDAQ: NAUT). The acquisition will enhance
VF's portfolio and business mix by adding new brands, boosting its presence in
department and specialty stores and providing the Company with a strong new
entry into the sportswear category. Nautica's sales in fiscal 2003 were $694
million. The transaction, which is expected to close early in the fourth
quarter of 2003, could add approximately $.10 to earnings per share in 2004.
A Milestone for Both VF and Nautica
Mackey J. McDonald, chairman and chief executive officer of VF, said, "Today
marks an exciting milestone for both VF and Nautica. VF will gain a powerful
lifestyle brand that extends across multiple product categories, including
men's sportswear and jeanswear, in addition to a broad array of licensed
categories including men's tailored clothing, dress shirts, accessories,
women's swimwear, fragrances, eyewear, watches and home furnishings. It also
provides additional diversification to our business mix by strengthening our
presence in department stores. At the same time, Nautica will benefit from VF's
superior supply chain, inventory and brand management capabilities."
"We are thrilled to be joining forces with VF, a company that is a great fit
for us as we share similar values, integrity and culture," said Harvey Sanders,
chairman, president and chief executive officer of Nautica Enterprises, Inc. "I
look forward to working closely with Mackey and his team as we transition our
business to become part of a larger organization that will afford us the
leverage to grow our various businesses and move forward. We believe this
transaction shows our commitment to returning to our shareholders enhanced
value on their investment."
David Chu, vice chairman of Nautica Enterprises, Inc., will assume
responsibility following the merger for the Nautica brand, overseeing global
design, product development and marketing. "I'm excited to be joining forces
with such a strong partner and I view this transaction as the best means of
maximizing the full potential of the Nautica brand. This year marks Nautica's
20th anniversary, and I view this transaction as a fitting way to celebrate
both the longevity of the brand as well as its bright future. I'm personally
looking forward to this new endeavor," he said.
Nautica will continue to maintain its headquarters in New York City and its
distribution center in Martinsville, Virginia.
Terms
Pursuant to the merger agreement, VF will pay Nautica shareholders $17.00 per
share in cash. The Company will also pay approximately $14.6 million, net of
tax, to cash out employee stock options, for a total consideration of
approximately $585.6 million.
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July 7, 2003
The boards of directors of both companies have approved the merger. The merger
is subject to Nautica shareholder approval, receipt of customary government
approvals and other customary conditions. In connection with the transaction,
VF has obtained commitments from Harvey Sanders and David Chu to vote all
Nautica shares owned by them in favor of the merger, representing a total of
approximately 10% of the current shares outstanding.
VF has separately entered into an agreement with Mr. Chu to acquire from him
his rights to receive 50% of the net royalty income from licensing the Nautica
trademark. Under this agreement VF will pay Mr. Chu $38 million upon the
closing of the transaction and $33 million on each of the third and fourth
anniversaries of the closing. Mr. Chu will also have the right to receive
payments in each of the next five years in the event an annual gross royalty
revenue threshold is exceeded.
VF Priorities
Commented Mr. McDonald, "We believe Nautica has the potential for significant
growth, both in the U.S. and internationally. Our priorities include the
following:
o Stabilize and reinvigorate the Nautica men's sportswear business
under David Chu's leadership and strong brand vision.
o Strengthen and grow the Nautica men's and women's jeans and Earl Jean
businesses, each of which are performing well at retail. These brands
will greatly enhance our jeanswear presence in department and
specialty stores.
o Identify opportunities to share resources between Nautica's retail
operations and VF's outlet business.
o Grow the business and reduce costs so that Nautica can achieve
returns in line with our long-term targets of a 14% operating margin
and a 17% return on capital within a 3 to 5 year period.
o Explore the development of a new women's sportswear line for future
launch. Research we recently conducted indicates that women have a
strong positive perception of the Nautica brand.
Mr. McDonald noted that the Company will be working with John Varvatos to
determine the best plan for the future growth of the John Varvatos branded
business.
"We have searched long and hard for the right brand for our portfolio and the
right opportunity to enhance shareholder value," Mr. McDonald continued.
"Nautica is it. It provides us with a new platform for profitable growth and
we're excited about the future potential we see for the brand. We're looking
forward to working with the very talented people within Nautica to realize this
potential."
Other Information
VF will finance the acquisition initially through available cash and short-term
borrowings. The Company anticipates that with any required borrowings the
resulting ratio of debt to total capital would remain below VF's long-term
target of 40%.
The financial adviser to VF was Citigroup Global Markets Inc.
Conference Call Webcast
Management will hold a conference call with investors to discuss this
transaction this morning at 9:00 a.m. EDT. Interested parties should call
888-413-4411, domestic, or 703-871-3795, international. You may also access
this call via the Internet at www.vfc.com.
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July 7, 2003
A replay of today's call will be available for one week and can be accessed by
dialing 888-266-2086, domestic, and 703-925-2435, international. The pass code
is 198377. A replay can also be accessed at the Company's web site at
www.vfc.com.
Cautionary Statement on Forward-looking Statements
Certain statements included in this release are "forward-looking statements"
within the meaning of the federal securities laws. Management cautions that
forward-looking statements are not guarantees and that actual results could
differ materially from those expressed or implied in the forward-looking
statements. Important risk factors that could cause the actual results of
operations or financial condition of the Company to differ include, but are not
necessarily limited to, the overall level of consumer spending for apparel;
changes in trends in the segments of the market in which the Company competes;
competitive conditions in and financial strength of our suppliers and of our
retail customers; actions of competitors, customers, suppliers and service
providers that may impact the Company's business; the Company's ability to
integrate new acquisitions successfully; the ability to achieve anticipated
cost savings from the recent restructuring initiatives; additional terrorist
actions; and the impact of economic and political factors in the markets where
the Company competes, such as recession or changes in interest rates, currency
exchange rates, price levels, capital market valuations and other external
economic and political factors over which the Company has no control. Investors
are also directed to consider the risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange Commission.
About Nautica
Nautica Enterprises, Inc., through its subsidiaries, designs, sources, markets
and distributes apparel under the following brands: Nautica; Nautica
Competition; Nautica Jeans Company; Earl Jean; John Varvatos; E. Magrath; and
Byron Nelson. For more information about the company, please visit
www.nautica.com
About VF
VF Corporation is the world's largest apparel company and a leader in
jeanswear, intimate apparel, playwear, workwear and daypacks. Its principal
brands include Lee(R), Wrangler(R), Riders(R), Rustler(R), Vanity Fair(R),
Vassarette(R), Bestform(R), Lily of France(R), Lee Sport(R), Healthtex(R),
JanSport(R), Eastpak(R), Red Kap(R) and The North Face(R).
VF Corporation's press releases, annual report and other information can be
accessed through the Company's home page, http://www.vfc.com.
Contacts:
VF Corporation: Cindy Knoebel, CFA
VP, Financial & Corporate Communications
VF Services, Inc.
(646) 472- 2817/(336) 424-6189
Nautica Enterprises, Inc.: Shannon Froehlich
VP-Corporate Investor Relations
(212) 541-5757