May 18 (Bloomberg) -- VF Corp. Chief Executive Officer Eric Wiseman said the world’s largest clothing maker is in “active discussions” on possible acquisitions to increase revenue from outdoors and action-sports brands.

“There are lots of really interesting discussions about brands that may be appropriate,” Wiseman, 53, said in a May 15 interview at VF’s headquarters in Greensboro, North Carolina. “I hope we can make an interesting acquisition this year.”

Wiseman said he talks daily with Frank Terkelsen, VF’s vice president of mergers and acquisitions. The company has also held discussions with potential targets, said Wiseman, who refused to identify any.

VF already makes North Face apparel as well as skateboarding and surfing footwear from Vans and Reef. They made up VF’s most profitable segment last year, reporting sales growth while denim revenue declined.

While VF “would always consider a really compelling idea” in any category, it’s now focused on expanding in outdoor, action sports and sportswear, Wiseman said.

Efforts to reduce inventories by $100 million by the end of December will generate an additional $50 million in cash flow from operations, raising the total to $750 million this year, Wiseman said. VF had about $276 million in cash as of March 31 and $1.1 billion in credit, according to a company statement.

“We’re in a position to do something,” Wiseman said. Financing would depend on the size of the acquisition, he said.

VF rose $1.56 to $55.95 at 4 p.m. in New York Stock Exchange composite trading. The shares have advanced 2.2 percent this year.

‘Weak Retail Environment’

Retailers in the U.S. may buy “very conservatively” for the back-to-school shopping season as job fears continue to grip consumers, Wiseman said. Shipments by the producer of Wrangler jeans and JanSport backpacks my fall 1 percent to 3 percent in 2009 as stores brace for “a weak retail environment,” he said.

The company plans to cut its own inventories more than 10 percent by the end of December, compared with a 4 percent reduction as of March 31, Wiseman said.

“I’d be thrilled if every shelf in America got bought clean, but I don’t expect that to happen,” said Wiseman, who took over as CEO in January 2008, a month after the start of a recession that’s eliminated 5.7 million U.S. jobs. “Fear drives conservatism in consumer spending, and the biggest fear now is about losing jobs.”

The lower shipments will contribute to the company’s projected revenue decline of 5 percent to 7 percent this year. The stronger dollar will account for more than half of that drop, the company forecast April 28.

‘Not the Case’

Rising unemployment in the U.S. manufacturing and petrochemical industries will also hurt sales, Wiseman said. In past recessions, orders for VF’s industrial uniforms have signaled recovery. Those orders remain down this quarter, and the company has detected no turnaround, Wiseman said.

“I wish we could tell you that we see it, but that’s not the case,” Wiseman said.

Efforts to slash annual costs by $100 million included a “slight reduction” in marketing spending. That didn’t interfere with the re-signing of Brett Favre as a Wrangler spokesman, Wiseman said.

The quarterback recently signed as a pitchman for a third straight National Football League season, Wiseman said. Favre, who led the Green Bay Packers to a Super Bowl championship after the 1996 season, called it quits this year after playing for the New York Jets.

Favre, even in retirement, appeals to Wal-Mart shoppers, Wiseman said. Wal-Mart Stores Inc., VF’s largest customer, accounted for 11 percent of revenue in the year through Jan. 3, according to a securities filing. VF won’t disclose terms of the new one-year contract with Favre, 39.

“He hunts, he fishes and he plays football,” Wiseman said of Favre, who signed a Packers helmet and football on display in the CEO’s office. “He’s like a lot of America.”

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net.

Last Updated: May 18, 2009 16:06 EDT