VF Adds Swank to Its Jeans Line

Updated from 3:16 p.m. EDT

VF Corp.(VFC Quote), known for its mass-market brands like Lee and Wrangler, is getting trendy.

The clothing giant said Thursday that will buy high-end jeansmaker Seven for All Mankind for $775 million. The company also agreed to purchase Lucy Activewear, a maker of chic comfortable clothing such as yoga pants and tank tops, for $110 million.

The two brands will form the foundation of a new division dubbed VF Contemporary Brands, which is expected to generate annual revenue of over $350 million. VF had revenue of $6.22 billion last year.

"These brands extend our reach to important and growing consumer segments, broaden our presence in healthy and growing channels of distribution, provide us with additional vehicles to expand our direct-to-consumer business through owned retail stores and online sales and offer the potential for continued growth internationally," said Mackey McDonald, chief executive of VF, which also owns brands such as Vans, North Face and Nautica.

For VF, which has solidified its position in the mass channel, the purchases mark a big foray into the luxury market. The company only other upscale brand is John Varvatos.

"They are dominant in the mass and middle market and they're just beginning to make a serious dent in the upscale market," says Harry Bernard, partner with the San Francisco fashion-marketing and consulting firm Colton Bernard.