Activist investor Engaged Capital has taken a stake in VF Corp. and wants the the owner of the Vans and Supreme Brands to make divestitures to pay down debt.

The Denver-based company should hire advisers to review non-core divestitures and publicly commit to no further acquisitions, Engaged said in presentation Tuesday at the 13D Monitor Active-Passive Investor Summit in New York, confirming an earlier Bloomberg News report.

It added that excess cash flow and divestiture proceeds should be used to retire debt, which amounted to about $7.9 billion as of July 1, according to data compiled by Bloomberg. VF should also bring in new board members, Engaged said.

VF rose 13 percent to $18.32 at 12:23 p.m. in New York trading Tuesday, giving it a market value of $7.1 billion.

“We value the views of our shareholders and seek to maintain an open dialogue with the investment community,” a representative for VF said in a statement. “VF has globally recognised and iconic brands and best-in-class talent. VF’s board and leadership team, including our recently appointed CEO Bracken Darrell, are taking immediate and decisive actions to strengthen the company’s position and return VF to strong, sustainable, and profitable growth in the interests of all our shareholders.”

VF and other apparel makers have been struggling with supply chain challenges and brand relevancy in recent years. The company, which also controls the North Face and Dickies brands, hired a new chief executive officer in June amid soft sales growth.

Last year, the company said that wholesale partners were canceling orders more often due to an “increasingly cautious” approach to consumer demand. It also cut its dividend in February to reduce debt.

By Crystal Tse

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