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11.3: Looking Forward: New Corporate Parent and New Corporate Social Responsibility Leader

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    On June 13, 2011, V. F. Corporation ( announced the purchase of Timberland for over $2.2 billion. V. F. already owned and operated several well-known apparel brands such as the North Face, Wrangler, and Lee. In announcing the purchase V. F. CEO Eric Wiseman commented, “The Timberland brand is synonymous with high-quality outdoor footwear and apparel. We believe the unique rugged outdoor positioning of Timberland will perfectly complement the premium, technical positioning of The North Face brand. This acquisition will continue the transformation of VF’s portfolio, propelling VF’s outdoor and action sports businesses to 50% of total revenue.”

    V. F. offered $43 for each Timberland share, a premium of 43 percent to Timberland’s closing price the day before the offer. On the announcement day, Timberland shares climbed $13.21, or 44 percent, to $43.20. Timberland stock had traded between $15.07 and $45.72 from June 10, 2010, to June 10, 2011, and was at $30 before the offer. The owners of about three quarters of Timberland’s stock, including Chairman Sidney Swartz and CEO Jeffrey Swartz, entered into a voting agreement and gave written consent for the deal on July 26.

    V. F.’s shares rose by 10 percent after the deal was announced, which added about $1 billion to the V. F.’s market capitalization. This was atypical as shares in the buying company usually fall due to stockholders expectations that most acquisitions end up destroying value. V. F. says it intends to both grow Timberland’s sales and increase Timberland’s sales efficiency. In 2010, Timberland’s operating margin was 9 percent, which was considerably lower than V. F.’s operating margin of 20 percent.Marc Gunther, “Timberland’s Jeff Swartz: ‘This Is Hard,’” Marc Gunther (blog), June 14, 2011,

    V. F. has not been a recognized leader on corporate social responsibility (CSR) or sustainability. The company is at an early stage of addressing climate change and other issues related to climate change. According to the Climate Counts Company Scorecard on V. F. (, the corporation has started to measure its company-wide impact it has on global warming (i.e., its greenhouse gas emissions or climate footprint) and has made some efforts to reduce its impact on global warming (i.e., its greenhouse gas emissions or climate footprint) through the North Face. It has, however, shown minimal public information that it supports public policy that addresses climate change and provides limited information on its company-wide efforts to address climate change.

    On June 28, 2011, after the announcement of V. F.’s purchase of Timberland, the company hired a new vice president for corporate social responsibility, former Dell executive Mark Newton. Newton is joining Timberland following eight years with Dell, most recently as executive director of global sustainability, where he was responsible for balancing the company’s growth strategy to minimize impacts on natural and human resources across the value chain. During his tenure with Dell, he directed global policy development, stakeholder engagements, and corporate strategies on environmental and social issues. Prior to joining Dell, Newton led environmental technology programs at Apple and Motorola. He sits on the advisory boards of Clean Production Action and

    Newton will lead the CSR global team.“Timberland Hires CSR Vice President,” Environmental Leader, He will report to Timberland’s CFO Carrie Teffner and be responsible for the following:

    • Overseeing Timberland’s effort to demonstrate environmental leadership and reduce the company’s environmental impact as a global brand
    • Ensuring that the human rights standards set forth by the company’s code of conduct are adhered to and enforced by all Timberland vendors and suppliers worldwide
    • Creating a global standard for community service through innovation, regional relevance, and employee engagement
    • Executing against Timberland’s commitment to transparency and reporting by engaging a diverse set of stakeholders

    Jeff Swartz’s last day as CEO of Timberland was September 13, 2011. In his final blog post he wrote the following:

    Recently, I listened to the acquirer’s CEO addressing Timberland employees, in an open air town hall meeting (we take the 10 minutes of New England summer time seriously here, and so when we can meet outdoors, we do). It tore my guts out, to sit in the community gathering as a listener, watching my colleagues watching the new boss, wondering what changes are in store for our brand, our business, our community…an environmental activist in our ranks rose, way in the back, to ask the new guy, the Boss to Be, about sustainability.

    “Tell us, please, why sustainability is important to you.”

    And the man with whom I negotiated hard and long for the best possible deal for shareholders stood his ground, and answered, authentically and naturally. “The answer is simple—we believe that sustainability is good for the business and good for the world environmentally.”

    He went on; the answer got more detailed and more concrete. But I had stopped listening.

    For 30 years, we’ve been trying, fighting, struggling, to choreograph the intricate interaction between shareholder value, consumer demand, and social accountability. I have the scars, and the long list of failed efforts, incomplete outcomes, unrealized dreams and frustrated ambitions before my eyes all the time that reflect this passionate effort. And yet in this poignant moment of transition, from a business run by my family for three generations to a business to be run by relative strangers—here is the CEO of a 10B$ powerhouse, talking about sustainability simply and easily—good for business, good for the earth. And he means what he says. And it strikes me, hard, as I sit there—30 years later, a vitally important conversation has shifted. Maybe, there comes a time to say, “my job here is finished.”Jeff Swartz, “Endings and Beginnings,” The Bootmakers Blog, September 13, 2011,

    • V.F. Corporation has had limited efforts in sustainability, but the acquisition of Timberland provides it with the opportunity to be a global leader in business sustainability.
    • The stock acquisition of Timberland provided great value to the stockholders of V. F. Corporation.
    Exercise \(\PageIndex{1}\)

    Prepare a memo for V. F. that summarizes Timberland’s experience with CSR and sustainability reporting. What are the benefits and difficulties of the different activities within reporting? What are the main lessons that have been learned?

    Exercise \(\PageIndex{2}\)

    Review V. F.’s corporate website. Prepare a two-page memo to the company’s CEO outlining whether V. F. should more broadly adopt Timberland’s CSR reporting, identifying which of its brands would most likely benefit the most from sustainability reporting.

    Exercise \(\PageIndex{3}\)

    Upon reviewing former CEO Jeff Swartz’s final blog post, do you agree or disagree with his finding that the business world has shifted to sustainability?

    Exercise \(\PageIndex{4}\)

    Review Timberland’s timeline included at the end of this chapter. Do you think including environmental and social indicators in the timeline paints a fuller picture of the history and actions of the company? Why or why not?

    Table 11.1 Timberland Timeline
    Year Key Events Sustainable Performance Indicators
    Economic Ecological Social
    Revenue / Net Income (in Millions of Dollars) Stock Price (First of Year and Adjusted for Splits) GHG Emissions Inventory (Metric Tons) Employees Community Service Hours
    1955 Nathan Swartz bought the remaining interest in Abington Shoe Company and welcomed his sons into the company, manufacturing private label shoes for leading brand manufacturers for almost 10 years.          
    1973 The Swartz family developed the “Timberland” brand name. Timberland created its first guaranteed waterproof boot under the Timberland name.          
    1975 Company produces 25,000 Timberland brand boots and approaches the $1 million mark in sales.          
    1978 The Swartz family changed the name of the company to the Timberland Company.          
    1980 Timberland footwear introduced into first international market—Italy.          
    1987 Timberland went public on the American Stock Exchange.   $1.80 (June 30, 1987)      
    1989 Timberland partnered with City Year, Inc., the Boston-based youth “urban peace corps,” to support community service. Since then, Timberland has provided over $10 million to City Year helping them to expand their service program to 13 cities across the United States. $156/$6 $1.84      
    1992 To sustain the communities in which its employees live and work, Timberland developed what later became the Path of Service program, a progressive corporate policy offering employees 16 hours paid leave to perform community service. Timberland launched its “Give Racism the Boot” awareness campaign supporting diversity and standing up against oppression internationally. $291/$13 $1.14      
    1997 Timberland increased the benefit of paid employee volunteer time to 40 hours. Timberland introduced apparel for kids. $796/$47 $4.72   5,100 17,500
    2000 The company was listed as one of the “100 Best Corporate Citizens” by Business Ethics Corporate Social Responsibility Report. Timberland issues its first annual corporate social responsibility report. $1,091/$124 $12.47   5,400 34,200
    2006 The company set a new standard for product transparency and increased its efforts to minimize environmental impact by introducing new, more eco-conscious packaging for its footwear products and a “nutritional label”—product information label that details aspects of the company’s environmental and community footprint. The company unveiled a solar panel installation at its distribution center in Ontario, California. At the time, the system was one of the 50 largest in the world, generated 60% of the power for the distribution facility, and reduced the facility’s greenhouse gas emissions by an estimated 218 metric tons per year. $1,568/$106 $32.92 25,599 6,300 80,600
    2009 Shrinks the carbon footprint of its US stores by an additional 11% by switching 70% of its North American stores to LED lighting. Timberland and Soles4Souls launch nationwide in-store shoe donation program. $1,286/$57 $11.68 16,273 5,700 82,300
    2010 Timberland ranks #2 on Climate Counts’ list of companies making aggressive strides in fighting climate change. $1,429/$97 $18.19 15,889 5,600 75,900
    2011 Timberland stock reaches highest price ever at $45.72 on April 28. VF Corporation announces purchases of Timberland for $2.2 billion on June 13.   $24.79    

    Sources: “Our History,” Timberland,; “Home Page,” Timberland,; “About Timberland,” Timberland,; “About Us: Timeline,” Timberland,

    This page titled 11.3: Looking Forward: New Corporate Parent and New Corporate Social Responsibility Leader is shared under a CC BY-NC-SA license and was authored, remixed, and/or curated by Anonymous.