V.F. Corporation is the name behind the labels. Among the world's top jeans makers, it owns a bevy of denim brands: Lee, Riders, Wrangler, and Rock & Republic. Other holdings include JanSport and Eastpak (backpacks), North Face and Eagle Creek (outdoor gear), Red Kap and Bulwark (work clothes), Nautica (sportswear), lucy (women's athletic apparel), 7 For All Mankind (premium denim, casual wear), and Vans (footwear). V.F.'s Majestic label offers licensed MLB, NFL, and NBA apparel. Direct sales to consumers are rung up through Internet sites and more than 1,500 VF-operated retail stores worldwide. About 60% of V.F. products are sold through department and specialty stores, mass merchants, and discounters.
V.F.'s fast-growing Outdoor & Action Sports business accounted for 60% of the company's sales during 2015. V.F.'s stable of popular outdoor brands include The North Face, Jansport, Vans, Kipling, SmartWool, and recently-acquired Timberland, a maker of adventure-oriented footwear and apparel. Its Jeanswear business, which generates about 25% of sales, includes the Lee, Riders, Rustler, and Wrangler brands, as well as the fashion denim and sportswear brand Rock & Republic. Imagewear, which includes licensed athletic apparel and occupational clothing, accounts for around 10% of sales.
The company's direct-to-consumer operations include full-price stores, outlet stores, and e-commerce. V.F. operates more than 1,400 stores, most of which are single-brand shops, such as The North Face, Timberland, Vans, among others. It also runs about 75 VF Outlet stores in the US that sell a broad range of excess quantities of VF-branded products. On the wholesale side of the business, VF distributes apparel to specialty stores, department stores, national chains, and mass merchants.
V.F. Corp. rang up 64% of its sales in the US during 2015, while the remainder mostly came from Europe, and to a lesser extent from Asia, Canada, Mexico, and Latin America. The apparel maker has manufacturing plants in the US, Mexico, Central and South America, the Caribbean, Europe, and the Middle East.
Sales and Marketing
The company generates most of its sales through other retail chains. V.F. Corporation's 10 largest customers accounted for 22% of total revenues in 2015. Retail-giant Wal-Mart Stores is V.F.'s largest customer, accounting for 27% of its total sales, and a major buyer of its jeanswear. V.F. also sells products on a direct-to-consumer basis through VF-operated stores and e-commerce sites, which accounted for 27% of total revenues in 2015.
The apparel maker buys ads in trade publications, and on radio and television. Its digital initiatives include social media, mobile platforms, and the Internet. The company spent nearly $713 million (almost 6% of net sales) on advertising and promotion in 2015, compared to $714 million and $671 million in 2014 and 2013, respectively.
V.F. Corporation has enjoyed revenue and profit growth for much of the past several years as it continues its worldwide expansion.
Continued strong demand for its outdoor and action sports brands propelled V.F.'s sales up 1% to a record $12.38 billion in fiscal 2016 (ended January). Its Outdoor & Action Sports line grew by 3% with light global sales growth for The North Face, Vans and Timberland brands. The company's direct-to-consumer revenue grew 6% thanks to new store openings and an expanding e-commerce business. Geographically, sales in the US rose 4% while international sales declined 5% mostly due to unfavorable foreign currency exchange rates.
The company's net income rose 1% to $1.2 billion thanks to revenue growth and because in FY2015 it incurred more than $250 million more in goodwill impairment and intangible asset expenses. Cash from operations fell 32% to $1.15 billion for the year as the company paid $250 million in discretionary contributions to its US qualified pension plan and used more of its cash to build its inventory.
V.F. Corp. takes a two-track approach to growth: both organic and through acquisitions. The company already established an aggressive revenue target of $17.3 billion by 2017 (up from a record $12.38 billion in 2015), expecting annual growth of 10% (8% from organic growth and 2% from anticipated acquisitions). To this end, V.F. Corp. opened 186 stores worldwide during 2015 after opening 188 stores and 164 stores in 2014 and 2013, respectively. It's been focusing on brands with high retail-growth potential, such as Vans, The North Face, Timberland, and Kipling.
Beyond its brick-and-mortar stores, the company expects its direct-to-consumer business, via e-commerce sites for countries around the world, will grow at a faster pace the overall growth of the company and amount to 25% of total sales by 2021. In late 2014, the company continued to roll out country-specific brand sites in Europe and Asia, enhancing its ability to deliver a superior, localized consumer experience. Also in 2014, V.F. opened a new distribution center in fast-growing China to enhance its responsiveness and grow sales in the emerging region.
The gear-and-apparel maker has invested heavily in acquisitions to further build its outdoor and action sports business, which has grown to account for more than 50% of sales. V.F. in September 2011 acquired global footwear maker Timberland for $2 billion. Marking the biggest acquisition in the company's history, V.F. was enticed by Timberland's overseas presence and its strong growth during the past decade.
In 2010, on the wholesaling side V.F. took control of its Vans-branded products marketing venture in Mexico. The roughly $30 million purchase also put V.F. in charge of Vans retail stores.
V.F., founded in 1899, is controlled in part by trusts established by its late founder John Barbey.