VF Corp. aims to more than double its Asia Pacific business over the next five years, driven by brands including Vans, Timberland and The North Face.
The Greensboro, N.C.-based firm said Wednesday at an investor meeting in Shanghai that it has a new plan to increase its revenue in the region to $2 billion by 2017, from $900 million currently. That represents an annual growth rate of 17 percent from fiscal 2012.
“Our Asia Pacific revenues have grown nearly fivefold since 2007, and we continue to see tremendous opportunities for growth in all our brands,” Eric Wiseman, VF’s chairman and CEO, said in a statement.
Aidan O’Meara, president of VF Asia Pacific, added, “VF has invested heavily and consistently in consumer research in China, which has helped us better understand Chinese consumers and position our brands in a way that speaks to their desires and aspirations.”
With the addition of Timberland and continued growth in the Asia Pacific and European businesses, international sales are expected to comprise 45 percent of VF’s total revenue by 2017, up from 37 percent currently, said Karl Heinz Salzburger, group president of VF International.
By brand, The North Face will have the largest rate of growth, at 26 percent every year for the next five years, adding $340 million in sales in the region by 2017, VF said.
Vans will rise 22 percent each year to add $200 million to its Asia Pacific business, driven by deep connectivity with youth culture, expanding its direct-to-consumer business and delivering locally relevant product innovation.
Timberland, the company’s largest brand in the region, is targeting annual revenue growth of 13 percent to reach $230 million. The brand will hit that figure by building its spring and summer women’s and direct-to-consumer businesses.
The Kipling brand of premium casual bags and accessories expects to grow sales by $80 million, at an annual growth rate of 18 percent, supported by more investments in marketing and an expanding network of retail stores.
And the Lee brand of jeans should add $150 million in sales, with a 12 percent annual growth rate, through innovative localization, growing the women’s business and expanding distribution.
By region, Korea represents the biggest growth opportunity. Revenues there are expected to surge at an annual rate of 52 percent, said VF, via a subsidiary to be opened soon for both the Vans and Timberland brands.
Next is India, where the Vans, Lee and Wrangler businesses are expected to collectively grow at an annual rate of 22 percent.
China, which already represents about half the Asia Pacific region’s total revenues, should grow to account for 60 percent of total revenues by 2017, at an annual rate of 21 percent.
Finally, Japan sales should increase 8 percent annually, thanks to the addition of the Timberland label.