While most retailers are trading at a tiny fraction of their previous highs, struggling to cut costs and stay in business, VF Corp. (NYSE: VFC) is actually expanding.The Wall Street Journal reports (subscription required) that the company hopes to ad 70 new stores this year as part of an effort to reduce its dependence on department stores which offer low margins and uncertainty.
VF's brands include Nautica, The North Face, 7 For All Mankind, Lee Jeans and Vans and the company is also doing something else few of its competitors are doing in this market: looking to make acquisitions. The timing couldn't be better: VF has a solid balance sheet that isn't larded with the goodwill of ill-advised deals and the company has a manageable debt load -- one that has allowed the company to remain solidly profitable in spite of a decline in sales.
The best part: There are so many brands available at a fraction of what they were selling for during the merger and acquisitions boom years -- Poorly-financed companies like Liz Claiborne (NYSE: LIZ) are dumping brands for pennies on the dollar in an effort to remain viable, and better-managed companies have a chance to make some great deals.
The problem for investors is that VF hasn't seen its stock pummeled to the extent that Liz Claiborne and many others have so if the economy turns around quickly, it probably isn't poised for the big run-up. But it's strong balance sheet probably makes it a safer bet.
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