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VF Sets Sights on $11B in Sales by 2012

Eric Wiseman set the tone for his tenure as the new chief executive officer of VF Corp. during the company's annual meeting with analysts on Wednesday, unveiling an aggressive five-year growth strategy that targets increasing revenues to $11 billion...

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Eric Wiseman

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Eric Wiseman set the tone for his tenure as the new chief executive officer of VF Corp. during the company's annual meeting with analysts on Wednesday, unveiling an aggressive five-year growth strategy that targets increasing revenues to $11 billion by 2012 from an already-industry-leading $7 billion.

Wiseman, who took the reins as ceo on Jan. 1, upped guidance for revenues, operating margins and earnings per share over the next five years for the Greensboro, N.C.-based apparel giant. Revenues are expected to increase between 8 and 10 percent annually compared with previous targets of 6 to 8 percent annual growth. EPS are expected to grow between 10 and 11 percent a year, driven by a 15 percent improvement in operating margins.

VF has spent the last five years transforming itself from a conservative denim and innerwear manufacturer into a lifestyle brand powerhouse. While that strategy, implemented under former ceo and current chairman Mackey McDonald, has resulted in increasing revenues, earnings and share price, Wiseman's new targets indicate a belief that much of the company's potential has yet to be tapped.

"The diversity of our business model and our ability to execute well we believe allows us to deliver growth even in this difficult economic environment," said Wiseman during the meeting.

For Wiseman and his management team, the next stage in VF's evolution will depend on capitalizing on the company's growing portfolio of brands to become a true global brand titan. The primary drivers of this effort will be expansion in international markets and growing e-commerce and branded-retail operations. The company anticipates that its international business will account for 33 percent of revenues, or $3.6 billion, by 2012. International revenues are currently at around $2 billion.

Despite the heavy emphasis on expanding direct-to-consumer operations, Wiseman stressed VF has no desire to become a retailer and that retail sales will still represent a small portion of the company's overall revenues over the next five years. Retail is expected to grow to 22 percent of revenues, or $2.4 billion, by 2012 and represented 15 percent of revenues last year. The company has 652 stores around the world, the majority of which are located in the Americas. The target over the next five years is to bring store totals up to 1,340. The majority of retail expansion will occur in the Americas, where the company plans to open 392 stores for the Seven For All Mankind, Lucy, Vans, Kipling and North Face brands. Another 115 Kipling, North Face and Wrangler and Lee stores are slated to open in Europe and Asia.
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