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 1,400 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 has grown to account for more than 50% of the company's sales. 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 sportwear brand Rock & Republic. Imagewear, which includes licensed athletic apparel and occupational clothing, accounts for 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, and 7 For All Mankind, among others. It also runs about 85 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. rings up more than 60% of its sales in the US, while the remainder comes primarily from Europe and Asia, but also from 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 20% of total revenues in 2014. Retail-giant Wal-Mart Stores is V.F.'s largest customer, accounting for 8% of its total sales in 2014, 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 26% of total revenues in 2014.
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 $714 million (almost 6% of net sales) on advertising and promotion in 2014, up from $671 million in 2013.
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 to a record $12.28 billion in fiscal 2015 (ended January), an increase of 8% over the prior fiscal year. Its Outdoor & Action Sports line grew by 13% during the year, thanks to double-digit global sales growth for The North Face, Vans and Timberland brands. The company's direct-to-consumer revenue grew by 22% thanks to double-digit growth for The North Face and Vans brands, while international sales in the Americas, European, and Asia Pacific regions grew 14%, 9%, and 17% respectively.
Despite higher revenue, net income reversed course in 2014, falling by 13% to $1.05 billion, mostly because of higher goodwill impairment and intangible asset expenses. Cash from operations in 2014 grew by 13% to $1.7 billion, primarily thanks to higher cash earnings.
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 $12.28 billion in 2014), expecting annual growth of 10% (8% from organic growth and 2% from anticipated acquisitions). To this end, V.F. Corp. opened 188 stores worldwide in 2014, after opening 164 stores in 2013, focusing on brands with high retail-growth potential, such as Vans, The North Face, Timberland, Kipling, and Splendid.
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. 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.
V.F. Corp. is not afraid to cut brands that aren't profitable to free up resources. In 2012, for example, it sold its majority stake in upscale men's designer brand John Varvatos to private equity Lion Capital.
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.
A year earlier, 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. Corp. was hoping to boost its outdoor business and its bottom line further through its 2013 bid to take over Australia's boardwear maker Billabong but the Aussie company wanted more than the 526.8 million Australian dollars (US $556 million) V.F. was willing to pay.
V.F., founded in 1899, is controlled in part by trusts established by its late founder John Barbey.