VF Corporation recently outlined its position and some of its plans for the future at the ICR Xchange conference earlier this month. It is focusing on brands that it thinks have potential for organic growth, global reach and margin expansion. The company stressed that it had a successful record of acquisitions. In the last 10 years it has bought new brands with sales of $3.9 billion, and sold brands with sales of $1.3 billion.
For the full 2009 fiscal year, VF’s outdoor and action sport division will make up 38 percent of sales, for the first time surpassing jeans, which made up 35 percent. Just eight years ago it didn’t even have an outdoor division, but that is now a $2.8 billion business.
Sales outside the U.S. make up 27 percent of the total. Retail sales account for 17 percent. Like the development of direct sales to the consumer, international expansion is a priority at VF, but already in 2009, VF reached its 2012 target of having sales outside the U.S. make up 33 percent of the total.
The management broke down the compound annual growth rate CAGR over the last few years of several of its brands: The North Face rose by 29 percent a year, Vans by 22 percent, Kipling by 25 percent and Napapijri by 22 percent.
The CAGR for sales outside the U.S. was 21 percent, and this breaks down to 16 percent in Europe, the Middle East and Africa, and 52 percent in Asia-Pacific. In 2009, the Asia-Pacific region had 25 percent growth.
VF Corp. doesn’t plan to touch the brand culture of the companies it acquires but plans to work on the supply chain. It wants to increase its market share in Europe. In 2010, it is expecting enormous growth in China, though overall it has a cautious outlook for the year. Progress will be driven not only by China, but also by outdoor/action sports and direct-to-consumer sales.