VFC VF Corporation

VF Corp. on Thursday said it agreed to sell its contemporary brands business to Israeli textile company Delta Galil Industries Ltd. for $120 million, as the apparel company looks to reshape its portfolio.

VF Corp.'s stock has fallen 13% over the past 12 months to $60.63, and shares were inactive in premarket trading.

Delta Galil stock, down 16% over the past 12 months, gained 13% Thursday in Tel Aviv. Delta Galil is a global maker and marketer of private-label apparel.

The contemporary brands segment includes denim brands such as 7 For All Mankind, and lifestyle apparel brands like Ella Moss and Splendid. The segment had sales of $344 million last year, or about 2.8% of VF Corp.'s total revenue.

Delta Galil's Chief Executive Isaac Dabah said the brands would help diversify the company's product offerings and distribution channels, while adding "significant strength" to its structure.

Mr. Dabah also said the deal would help the company, which had sales of $1.08 billion in 2015, boost its branded business and expand its overall business globally.

VF Corp. Chief Executive Eric Wiseman said in a prepared statement that the company was "taking a focused and proactive look" at its composition and adjusting its portfolio to better position the apparel conglomerate for growth.

In March, VF Corp. said it was looking for strategic alternatives for its licensed sportswear division, a move Mr. Wiseman said could help the company "achieve its future potential." The company's sportswear segment holds the Majestic brand, the official supplier of Major League Baseball uniforms and apparel.

The companies said the Delta Galil deal is expected to close during VF Corp.'s third quarter.

(END) Dow Jones Newswires

June 30, 2016 08:05 ET (12:05 GMT)

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