On Dec. 3, VF Corp. will be honored as the Company of the Year at the FN Achievement Awards. Below is an article from the magazine’s Dec. 2 print issue about how the 120-year-old powerhouse successfully balances profit and purpose.
VF Corp. has mastered a multipronged brand strategy built around self-expression, the outdoors and a greener future, and the proof is in the numbers: The company’s stock is up 28% this year.
VF spun off its jeans business in May, a move that allowed it to focus on its outdoor and active brands, such as Vans, The North Face, Timberland, as well as smaller labels Altra, Terra and Kodiak.
With a sharpened portfolio, the company has been able to “move more quickly and pursue new opportunities,” said Steve Rendle, VF chairman, president and CEO. “Our streamlined portfolio comprises a set of brands that position us to leverage VF’s strengths and do what we do best. It also leads us to be more nimble and agile so we can quickly adapt to changing dynamics and consumer behaviors, which are quite fluid in today’s marketplace.”
And analysts like what they see.
“Steve and his team have demonstrated strong, thoughtful, purposeful leadership,” said NPD Group senior industry adviser Matt Powell. “There is a clear vision of where this company is going. They’ve taken a leadership position on the idea of purposeful management. Their mission statement is clear and concise, and they are living out these principles every day. That is an important lesson for brands and retailers in this space.”
Case in point: Consumers increasingly crave sustainable goods and want their dollars to go to businesses that reflect their values.
That’s one reason Timberland has found an even stronger following lately. The label, which VF bought in 2011, has been at the forefront of using recycled materials, gold-rated tanneries and leathers sourced from regenerative ranches. This year it also built on its Nature Needs Heroes ad campaign, featuring six real people making a positive impact on the environment.
“We’ve been doing a lot of these things all along, but now it’s really on the forefront of consumers’ minds,” said Tracy Smith, VP and GM of Timberland Americas. “We want to continue to engage with them on that.”
As a result, Timberland has experienced growth in its men’s casual footwear and apparel, as well as in women’s shoes.
Equally strong is perennial overachiever Vans. The Southern California-rooted brand is projected to hit $6 billion in revenue by 2024 and continues to evolve well beyond the U.S. skate market into a global lifestyle label. While its sales slowed in the most recent quarter compared to 2018, they still rose 14%. And corporate bosses are bullish about its future, particularly as it scales up in Asia.
In 2019, Vans found success with its direct-to-consumer business, elevated retail experiences, do-it-yourself self-expression shoe programs and event activations.
“We’ve done more things this year to allow [customers] to engage and participate with the brand, to be more than a spectator,” said Mitch Whitwaker, GM of Vans USA. “Whether online or at an event, we want them to do something creative.”
That focus has paid off for retailers too, such as teen specialist Journeys.
“They are dialed into who their core customer is, what the brand represents — they are not just one thing,” said Journeys president Mario Gallione. “Their diversity within the franchise assortment and related accessories, apparel and footwear is very strong. Vans has a great system in place for infusing freshness in the product line at the right time. They don’t allow the line to get stale.”
Looking ahead, VF plans to fuel growth internationally and on its DTC platforms, with half of sales coming from outside the U.S. Within five years, wholesale and DTC will be split evenly, accounting for 50% of revenue.
“Across our entire enterprise, we are working to become more consumer-minded, retail-centric and hyper-digital in everything we do,” said Rendle. “On the consumer front, our portfolio continues to evolve in line with what consumers are looking for — compelling and meaningful brands that deliver innovative products along with powerful brand experiences.”
The 33rd annual FNAA ceremony will be held at the IAC Building in New York. Sponsors for the event include Klarna, Geox, The Style Room Powered by Zappos, FDRA, Micam Milano and Buchanan’s Scotch Whisky.