President, Chief Executive Officer and Chairman of the Board, Kontoor Brands, Wrangler (brand of Kontoor Brands, Inc.)
Kontoor Brands CEO Scott Baxter sits down with Jim Cramer
Kontoor Brands Chair, President, and CEO Scott Baxter joins 'Mad Money' host Jim Cramer to talk acquiring Helly Hansen, ...
About Scott Baxter
Scott Baxter, chairman, president and CEO of Kontoor Brands, discussed the company's acquisition of Helly Hansen for roughly $900 million in a February 2025 interview with Jim Cramer on "Mad Money." Baxter said the acquisition gave Kontoor both an outdoor and workwear brand, describing it as a "really nice fit" that offers a growth opportunity. He noted that the company had been patient in looking for deals and moved quickly when the Helly Hansen opportunity arose. Kontoor also preannounced fourth-quarter results that beat expectations on both revenue and earnings. In a separate October 2024 podcast focused on financial literacy, Baxter discussed personal finance strategies, including the importance of building a budget, establishing an investment pattern, and paying down debt. He recounted his experience during the 2008 financial crisis, saying it was a "real lesson" in how quickly a portfolio can lose value. Baxter has also emphasized Kontoor's commitment to Greensboro, North Carolina, stating in a 2019 interview that he was "100 percent committed" to keeping the company's headquarters there and investing in the community.
Transcript (23 segments)
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Jim Cramer0:11
Yes. Good morning. We learned that Kontoor Brands, maker of Wrangler and Lee jeans, is buying Helly Hansen. That is a global outdoor and workwear brand for roughly $900 million. This is a major move for Kontoor, which was spun off by VF Corp back in 2019, spent the next few years trying to stabilize its denim business during the pandemic. Terrific business after years of cost cutting, they're back in growth mode, and that includes making acquisitions on top of this deal. Kontoor preannounced the fourth quarter results, delivering a comfortable top and bottom line beat. There's a reason this stock shot up three and a half bucks yesterday and a bit more today. So can it keep climbing? Let's dig deeper with Scott Baxter. He's the chairman, president and CEO of Kontoor Brands for more. Mr. Baxter, welcome back to Mad Money.
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Scott Baxter0:52
Hey, Jim, how are you? It's good to be back.
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Jim Cramer0:55
I'm so glad you're here. All right, so I have to tell you, I pulled everybody in the office. Everybody knew about this company. Everybody. Everybody had either some foul weather or they had some ski, or I had some jackets. I never — I saw many, many times — never even knew what it was. Just knew that I liked it. How did you spot this one and how did you get it?
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Scott Baxter1:15
Well, I'll tell you, that's great to hear because, you know, Jim, it's a small market for us in the United States. One of the reasons that we got it was because it's about $140 million business here, and it should be much bigger. It's $100 million in Canada. We got it through a relationship with CTC. And you know, those folks up in Toronto, just a terrific group of people. Greg Hicks and his team have been absolutely wonderful to deal with. We knew that we wanted an outdoor and or a workwear company, Jim. And here we got both in this acquisition. So it was a really nice fit for us. And now we've got a growth opportunity. You know it's growing a little bit faster than the denim business. And I think the other thing for us, Jim, is I've got a strong background in outdoor, as you know, and our CFO, Joe L'ecuyer, has a really strong background in outdoor. So it'll be a really nice fit for us going forward.
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Jim Cramer2:00
Now. In terms of the price points, I looked at it on Amazon. I mean, you've got stuff that's inexpensive that frankly is terrific and stuff that's a little more expensive. But this is really a brand new kind of category for you. I mean, we're talking about some 300, 400, $500 stuff. How do you have the right people? You have denim people. How are they going to do this?
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Scott Baxter2:22
Well, I'll tell you. One of the things that we're going to do, Jim, is we've got a really good technology platform, and we also have a really strong back end of very experienced people around the globe. We're going to go ahead and merge the back end and the technology piece, and the business itself is going to be a standalone SBU that's going to report directly to me. But we're going to let the business be because we have such a good team. They're very seasoned team that's been there for a very long time. They've grown the business now 3x over the last ten years, and we think that's one of the big advantages and why we bought the business.
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Jim Cramer2:53
I know it's sensational. How about Europe? What's going to happen there?
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Scott Baxter2:56
Well, it's about half of the business is in Europe. You know, about 75% sport and about 25% workwear. And we're going to continue to grow that business. We think that the big opportunity is here in North America. So that's where we're going to go ahead and put some assets in place to make sure that we help that and aid that along. But we think that we can continue to grow about $650 million business, Jim. And there's no reason it can't be $1 billion business.
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Jim Cramer3:18
I thought the same thing. I really felt that this is the biggest thing that could have happened. I also thought, by the way, there was a moment. I said, oh my God, did they have to fight against VF Corp to get this? This is what VF Corp needs to. But obviously, you know at Brackett he's got his hands full. He's got to get that balance sheet a little better. But your balance sheet was superb. He could handle this very easily.
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Scott Baxter3:37
Yeah, very easily. I mean, you know, we're going to probably put $200 million or so down on it and borrow about $700 million. Puts us in a really good position. You know, our balance sheet has been very strong for a few years now. I think, Jim, most people want to know what we were going to do with our cash. We already pay a healthy dividend. We've been buying back stock. But we were patient, Jim. We've looked at a lot of deals here in the last few years, and this one came and we moved really quickly. And like I said, it was a really good transaction with a really good group of folks and we made it happen quick.
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Jim Cramer4:04
Now, I know a lot of people focus on denim. I bought a lot of your stuff on Amazon, a lot of shirts. I mean, you know, shirts that I think — I'm going to mention a competitor, okay — that are — I'm going to mention Carhartt. I think they're every bit as good as Carhartt. And they're usually not half the price, but maybe only a third of the price. There is some — I mean, there's Carhartt has got a huge markup, but there's plenty of room for you to actually have a little bit higher price.
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Scott Baxter4:29
You know, we do a really nice job going all the way from, you know, maybe $20, $22 all the way up to $75, $80. Some of our Western shirts are very expensive relative to the marketplace. But they're worth it. You know, they've got great style and great design. So we run the whole gamut in most respects from a shirt standpoint. But we also, Jim, like I've said before, and you and I have talked about it, we just offer a great value. You know, one of the things about our brands is they're a value and a brand that you can trust. And that's why our consumer likes us so much.
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Jim Cramer4:58
Absolutely. Now, I do think there's one thing — Steve will put out a piece today which talked about you being perhaps the most sensitive to tariffs. Now tariffs are tricky. We don't know what's going to happen. Can you ameliorate it? Do you have room? That's one of the reasons why I said your price is low if you have to. I know you don't want to pass it on, but you'll be okay.
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Scott Baxter5:17
We'll be okay. We've got a really strong back end. We have a plan, you know. We know what we're going to do if that does come in place. And we're in a really good place with our consumer right now. So I feel real confident no matter what happens.
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Jim Cramer5:28
All right. Good. Because I know when you pre-announced it I said, oh, they must be pretty darn confident. I know you are. Now what is? When I look at H.H., the stuff that I have in my — I have in my closet right now, why did I never know who H.H. was? This is what's so interesting to me. I know Timberland, I know Columbia Sportswear, I know Patagonia, this company is so under marketed in our country that we don't even know if we have — we own any of it.
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Scott Baxter5:57
See, that's exactly it. And again, back to those green shoots. I mean, just what an opportunity for us to go ahead and grow this market. You know, this is far and away the largest outdoor market in the world, right. And here we've got a small business that we can make much larger. I'll give you an example, Jim. Canada is $100 million business for H.H. In the United States is $140 million business for H.H. We know how big that business should be in relation to the Canadian market. And we think that that's one of the key reasons why we were very interested in the brand. But it's really popular, Jim, it's funny when you go to Europe and you go to Canada, it's extremely popular.
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Jim Cramer6:33
Well, I wanted to know where it's going to be. I mean, is it going to be like North Face where you have some standalone stores? It's going to be wholesale, obviously, DTC — you guys are unbelievably good at DTC. For those who don't know that, where am I going to spot it?
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Scott Baxter6:45
All of the above. You just nailed it. So everything — they have about 50 stores right now, big wholesale partners around the world, you know, DTC, e-commerce. We'll just go ahead and make sure that we bring those to life in a little bit more, bigger view.
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Jim Cramer6:59
And now when you talk to your friends at VF, I mean, you kind of really outperform them mightily. I — I know it's not really a contest, but do they look at you and think, well, maybe we just should have kept you?
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Scott Baxter7:14
I'm not so sure about that. I don't think they'd ever tell me that. But I'll tell you this. We're thrilled that we were spun off. We're thrilled that we're an independent company because we can do great things for our employees, and we can buy these great brands, and we can do great things for our customers. And I got to tell you, Jim, it's been a lot of fun. It's been a great journey with a great team, and we're having fun.
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Jim Cramer7:32
And I do want people to know that I met Scott right when it happened first, and he had a vision of what could happen. A lot of us were thinking, oh my God, that's not the Jean company. It's what I might have worn when I was growing up, but I don't do it anymore. You had a vision of what it could be, and it's exceptional. And I really applaud you for what you've accomplished. It's just pretty amazing.
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Scott Baxter7:52
Well, thank you, Jim, and thanks for having us on.
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Jim Cramer7:54
Oh, appreciate it. Great to have you on. That's Scott Baxter, chairman, president CEO of Kontoor Brands. This is a terrific company. And what they did with this is just going to be great for years and years and years. That money is back. After the break. Coming up. UL solutions might be known for its safety marks, but does the company have Cramer's stamp of approval? His post e