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In 2013, VF Corp. really proved its footwear might.
The Greensboro, N.C.-based company, founded more than a century ago as an apparel player, came into its own in the category over the course of the year, thanks to massive sales at Vans, promising developments at The North Face and the beginnings of a turnaround by its most recent acquisition, Timberland. In fact, President, Chairman and CEO Eric Wiseman said the category provided the major story at the $11 billion company.
“This year, in particular, has been big in footwear for VF,” he said, hailing Vans and Timberland as bright spots. “[No matter whom I was talking to], I would be saying the same thing — this year was about the strength in footwear.”
And the health of the category was no accident.
Since the acquisition of Vans in 2004, VF has been plotting a course designed to make it a player in the shoe world.
“When we started talking about lifestyle brands, about how we were going to change our company to [take advantage] of what we know how to do in supply chain and branding, footwear became a natural next step,” Wiseman said.
The efforts appear to have paid off. About 25 percent of VF’s $10.9 billion in sales in 2012 came from footwear. And in the firm’s largest segment, the Outdoor & Action Sports division — home to Vans, Reef, Timberland and The North Face — shoes account for half of total sales.
Those results have analysts feeling upbeat on the company overall.
“[VF] is one of the best-performing stocks in our universe this year,” said Kate McShane, an analyst with Citi Research. “[It owns] the brands that resonate with Wall Street and consumers, too. They’ve been wildly successful.”
Mitch Kummetz, an analyst with Robert W. Baird & Associates, noted, “It was another year of record sales and earnings, but frankly, in some ways, it was your typical VF year: They tend to do well when it’s good and they do well when it’s bad, and that’s due to the strength of their portfolio of brands and strength of their company.”
Steve Rendle, group president of the Outdoor & Action Sports Americas division, agreed that the success was due in large part to the firm’s strong portfolio. “[Any recognition] is a validation of the journey we’ve been on for the last decade within VF and with VF Outdoor,” he said.
Take Vans, for instance. The Cypress, Calif.-based label has seen sales increases of 25 percent, 15 percent and 16 percent in the last three quarters, respectively, and the brand’s president, Kevin Bailey, said a global consumer segmentation study conducted in 12 countries last year will aid in achieving those numbers.
“It’s helped us gain deep insights into who our consumer is,” Bailey said of the survey, the largest undertaken by the company. “And it’s work I don’t think we would have completed at this point in our maturation without VF’s help.”
That understanding of shopper behavior shows in the product line, said Ken Hicks, president, chairman and CEO of New York-based Foot Locker Inc.
“VF is a terrific company that has been producing innovative products for several generations, all the way from the [checkerboard slip-on by Vans, seen] in ‘Fast Times at Ridgemont High’ to the great new product it has now,” Hicks said. “It is a strong partner that we know will always connect with its customer.”
As VF targets $17.3 billion in sales by 2017 — $11.1 billion of which is slated to come from the Outdoor & Action Sports division — VF’s ability to invest will be critical. This year, the company formed three technical innovation centers. The one for footwear — an existing Timberland facility at the headquarters in Stratham, N.H. — will work in conjunction with all of VF’s footwear brands to bring new technology into the lines.