Vans Plans Stock Sale to Public, Could Raise Up to $43 Million
The company that transformed sneakers into a hip, beach-oriented fashion statement, Vans Inc., plans to sell stock to the public for the first time.
In a filing with the Securities and Exchange Commission, the Orange-based shoe manufacturer and retailer said it plans to offer 3.3 million common shares for sale at a price between $11 and $13 each. If the offering is sold out, Vans will raise between $36 million and $43 million.
Company President Richard Leeuwenburg declined to comment Tuesday on the offering, citing SEC regulations that prohibit promotional activity during the offering period. He said no date has been set for the offering.
Vans traces its origins to the Van Doren Rubber Co., founded in 1966. The company’s distinctive canvas and rubber sneakers first became popular among surfers and later became a fad item after Sean Penn wore a black checkerboard pair in the 1982 hit movie “Fast Times at Ridgemont High.”
But success proved costly to Van Doren Rubber. After the company spent heavily to increase production, the fad wore thin and the company was stuck with a large debt. In 1984, it sought protection from creditors in a Chapter 11 bankruptcy reorganization, emerging a year later.
Vans was created in 1988 in a $74-million buyout of Van Doren Rubber by the Menlo Park venture capital firm of McCown De Leeuw & Co.
The public offering would reduce McCown De Leeuw & Co.’s ownership stake in the company to 31.7% from the present 50%. About $4.6 million of the proceeds from the offering will be used to repay loans owed to Security Pacific National Bank.
The balance will be used to redeem $29 million in subordinated debentures, a large portion of which are owned by McCown De Leeuw & Co. and Vans Chairman George E. McCown, according to the filing.
Some Vans shareholders plan to sell their holdings of more than 766,000 shares. Among them is the failed Executive Life Insurance Co., which has 415,755 shares, according to the filing.
In recent years, Vans has jockeyed for a position in the crowded athletic shoe market by trying to establish itself as a high-fashion alternative. The basic design of the shoe has remained unchanged for more than 20 years, but the company prides itself on being able to change colors and prints on short notice to keep up with the latest looks.
Vans had about $70 million in sales for its fiscal year ended May, 1990. At that time, Leeuwenburg said sales would have been higher except that imitators had flooded the market with Vans counterfeits. The imitation problem had been reduced with the help of some well-publicized crackdowns by the Mexican government last year.
Vans does a brisk business in special orders. About a quarter of the shoes manufactured by Vans are custom-designed by the wearer. The shoes are sold at major chains and shoe stores and through Vans’ own company-owned shoe stores.
