Lee, Wrangler owner to spin off jeans unit into public company

(Reuters) - VF Corp will spin off its denim business that houses Lee and Wrangler jeans into an independent public company, it said on Monday, seeking to sharpen its focus on more profitable brands such as Vans shoes and The North Face outdoor wear.

Revenue from Vans shoes has driven much of Greensboro, North Carolina-based VF's growth in recent years, while its jeans business has underperformed as large retailers including Walmart increasingly stock their own private labels.

Annual sales of VF jeans fell 1 percent in the company's latest reporting period.

The new VF, which will include brands like The North Face and Timberland, will have annual revenue of over $11 billion, while the upcoming jeans company is expected to have more than $2.5 billion in yearly revenue.

The transaction will be structured as a tax-free spin-off to VF's shareholders.

VF, which has a market value of about $38 billion, said it would incur one-time charges related to the transaction but did not give details.

Barclays was VF's financial adviser while Davis Polk and Wardwell LLP provided legal counsel.

(Reporting by Uday Sampath in Bengaluru; Editing by Sai Sachin Ravikumar)