After 16 years of navigating the leadership ranks at VF Corp., Steve Rendle, the firm’s new president and COO, has proven that he knows how to cultivate growth at the company.
He’s been in his new role for just over a month, but the self-described outdoor enthusiast has already narrowed his focus to two things: product innovation and the firm’s renowned talent acquisition-and-retention strategy.
“The beauty of being part of an organization for [so long] and growing through different leadership positions is that I’ve been a part of crafting and activating the strategies we have in place,” Rendle told Footwear News in his first interview since taking the helm.
After serving as SVP of VF’s Americas division and president of The North Face brand, Rendle is now responsible for developing and expanding all five of the company’s divisions — Outdoor & Action Sports, Sportswear, Jeanswear, Imagewear and Contemporary Brands — as well as overseeing global supply chain and direct-to-consumer platforms.
While it is focusing heavily on existing business, the Greensboro, N.C.-based firm is also known for snapping up and revitalizing faltering brands in record time.
VF closed its last major shoe acquisition, of Timberland, in 2011. Since then, the brand has soared to just under $2 billion in revenues, leaving market watchers and investors eager for the firm’s next move.
“VF has the secret sauce to turn brands around,” said Macquarie Capital USA Inc. analyst Laurent Vasilescu. “They did it with The North Face when that brand was oversaturated in the ‘90s, they’ve done it with Vans and Timberland, and now investors are ready to see that next deal happen.”
Insiders have speculated that Quiksilver, Puma and Deckers Brands are among VF’s potential targets, but Rendle is adamant that the company will exercise due diligence before forging any new partnerships.
Here, the exec talks about growing up in outdoor, his plans for international expansion and what he’s learned about the footwear business.
How would you describe your leadership style, and how have your past roles at VF Corp. contributed to that?
SR: I come at leadership from an open and collaborative place. I focus on having great leaders around me. I set a clear vision, but I delegate and work with [my team] to activate that vision and set that strategy in motion. My [current] position is an opportunity for me to touch the businesses I know on a global scale. I’ve worked closely with our international teams day-to-day up to this point, but now I can establish a slightly different relationship and look at how we can leverage and scale these businesses in a more significant way.
VF is heavily focused on the outdoor industry. Are you personally passionate about the space?
SR: I have a deep connection with the outdoors. I started skiing at a young age, near Spokane, Wash., where I grew up and my parents still live. In high school and college, my passion continued to grow. [I started participating in] road and mountain biking, climbing and hiking. To this day, skiing with my family remains my greatest passion. My love of the outdoors and mountaineering drove my studies in college and, ultimately, my career path. When I started with The North Face in 1999, it was an ideal role that married my personal interests with a great business opportunity.
What career accomplishments are you most proud of?
SR: Early in my career, when I was offered the role of president of The North Face, I would have thought I had achieved everything I could’ve dreamed of in my career. It was a major accomplishment. Another thing I’m proud of is playing a key role in the Timberland acquisition. I, along with a small group of people, led that from the initial contact all the way through to the integration.
How do you plan on driving growth in your new role?
SR: We spend a lot of time talking to our consumers and documenting that information. We’re taking those insights to inform innovation and concepts that lead to new product franchises. My other major focus is our people strategy. We have a culture of leadership and talent development. Most leaders would tell you that their success is directly related to the quality and talent of the people around them.
How would you describe VF’s acquisition strategy? SR: VF has a unique ability to identify and acquire brands and integrate them into the portfolio and then put them onto a successful growth trajectory. We have a tremendous amount of rigor behind how we manage businesses. We look for strong global brands that have a powerful connection with consumers. Timberland, for example, met all of those criteria. Timberland made some missteps in the past that were not that dissimilar to some of the missteps we knew The North Face and Vans had also made, and we understood how to correct them. We had a strong sense that Timberland would be a great addition to our portfolio, and that’s proven to be true. The acquisition of Timberland has set a new bar for the types of companies we would consider.
Do you see potential in the M&A market right now? SR: Acquisitions are top of mind for us, and it’s a place where we’d like to deploy our cash — but we will not acquire just to acquire. Outdoor & Action Sports is one area where we’ve said we’re most interested in — it’s where our largest, most successful brands sit. We like that space. We like the way outdoor and activity-based brands can connect with consumers, and we can establish a unique positioning for brands in that space. There aren’t a lot brands out there today that meet our criteria. So our discipline will stay at the forefront of our decision-making.
Is VF Corp. looking to expand more in footwear? SR: Prior to the Vans acquisition in 2004, VF wasn’t in the shoe business. Today, footwear is about 20 percent of our total revenue. The Vans and Timberland teams have helped us understand what it means to be a provider of innovative footwear, and they’ve helped us shape our supply chain to be able to service shoes. The North Face and Reef play a significant part for us in that space as well. Footwear is part of our consideration as we look at acquisitions.
Where do you see the biggest international opportunities? SR: Asia is an important part of our international platform. We’re at the beginning of our journey there. We’ve established a platform, and we’re focusing on five brands: The North Face, Vans, Timberland, Lee and Kipling. And we’re targeting a limited number of markets first. China has been our No. 1 focus — we’ve seen exceptional growth there. We established a wholly owned subsidiary in Korea two years ago, and that was brought along by the Timberland acquisition. Vans is also now live on that platform and doing well. We also have good business in Taiwan and Japan. We’re already in India, and we’ll grow into Indonesia, Malaysia and Singapore in the coming years.
What’s the strategy for countering currency woes?
SR: No one could’ve anticipated the FX headwinds that global companies are facing. But we have a disciplined approach to business and a finance team that are masters of managing and keeping us ahead of the pressures we’ve seen. We are reporting revenue at lower growth rates, but when you pull back and look at the constant- currency growth, we’re exceeding our targets.
What big opportunities lie ahead?
SR: VF is relatively young in our direct-to-consumer journey. We launched our first full-price retail business about 10 years ago with the acquisitions of Vans and Nautica. Both had a small retail presence that provided us with insight. Our DTC platform became one of our drivers, and we expect it to reach about $3.3 billion in 2015, representing about 27 percent of total revenue. Our online business, which is expected to reach about $600 million in 2015, is the fastest-growing part of our owned retail platform. We are continuing to make [digital] investments within all our brands.