apparel

VF Shifts Focus to 'Big Three': The North Face, Vans, Timberland

Faced with slowing growth, VF Corp. says it is shaking up its strategy and shifting focus to its “Big three” brands: the North Face, Vans and Timberland. As its denim products, including Wrangler and Lee, take on a lesser role, it’s also leaning harder into digital, and making marketing to Asian markets a higher priority.

Unveiling its new five-year plan for investors, CEO Steve Rendle says the new emphasis is on “reshaping” the brand portfolio and dialing up direct-to-consumer sales.

In a presentation, he says the Greensboro, N.C.-based company expects revenues through 2021 to grow between 4% and 6% per year. Vans, the North Face and Timberland are forecasted to grow faster, at between 6% and 8% a year. International sales are predicted to increase between 7% to 9% in that time frame, with direct-to-consumer growth expected to be between 8% and 10% a year.

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VF has had a rough go of it lately. In its most recent quarterly results, reported last month, the company says it dealt with “an inconsistent U.S. marketplace,” resulting in overall revenue gains of 1% on a currency neutral business. Sales of Vans sparkled, up 15% in the fourth quarter, and Timberland saw an improvement of 5%. But they fell 7% at the North Face, 1% at Wrangler and 11% at Lee.

Company execs also spelled out specific goals for each brand. At the North Face, where some 61% of sales currently it come from the seasonal mountain sports business, it intends to lower that ratio a bit by bolstering sales in mountain athletics, mountain lifestyle, and a category it describes as “urban exploration,” which focuses on “the concrete mountain of the city.” It’s continuing to build on storytelling linked to its “Never stop exploring” campaign and plans to add six new “Never stop” communities around the world.

Vans, meanwhile, will step up its appeal to a consumer it calls the “expressive creator,” an audience where it already has a strong digital edge: With some 31 million followers on social platforms, it claims best-in-class engagement on Instagram

In its ongoing quest to be the “largest, most sustainable lifestyle brand on earth,”

Timberland is out to reduce its dependence on sales of the classic boots in North America, making gains in women’s footwear, men’s apparel and experiential retail.

The company says that the new plan calls for sales of outdoor and actions brands, which currently account for about 66% of sales, to rise to 71% by 2021, with jeanswear’s share declining from 24% to 21%. While digital sales now make up 7% of sales in 2016, it hopes to increase that to 16% by 2021.

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