VF Corp. is raising its forecast for annual sales growth from a previously set rate of 6-8 percent. It is now looking at a compound annual growth rate of 8-10 percent over the next five years, making it reach $11 billion in revenues from the current level of $7 billion. Operating margins should increase by one percentage point to 15 percent, and net profit per share should growth by 10-11 percent annually.
Strong international expansion, accelerated growth and retail sales for all the group’s brands will be among the key drivers. Future acquisitions are expected to account for about $900 million of the sales target by 2012, with the Outdoor Coalition acting as a major aggregator.
VF’s Outdoor Coalition, which includes The North Face, Vans, Reef, Jansport, Eagle Creek, Eastpak, Napapijri and Kipling, will enjoy the biggest growth, with sales rising from $2.3 billion to $4.3 billion, or 39 percent of the total turnover. This will be achieved in part through product extensions for TNF in such areas as footwear, which now accounts for 15 percent of sales, and for Vans in apparel, now at 13 percent of revenues.
Retail sales will grow at a faster 30 percent rate within the Outdoor Coalition through more intense e-commerce efforts and additional corporate stores. TNF, which currently has 157 partner stores worldwide, will add 36 stores in the Americas and 40 stores elsewhere to the existing 30 company-owned doors. Vans, now with 184 stores, will add another 98 stores in the Americas and 25 stores overseas.
Foreign revenues will represent 39 percent of the Outdoor Coalition’s revenues by 2012. TNF recently bought back the distribution in China and started a joint venture in India. It sees potential for $500 million in sales in these markets by 2012. While TNF is now eyeing the Russian market, Vans should follow TNF in penetrating the Chinese market.
For 2008, VF is anticipating increases of 9 percent in revenues and 10 percent in profits.
Meanwhile TNF has made some major structural changes in the management of its team covering the European, Middle Eastern and African markets, creating many new positions or extending the responsibilities of previous managers.
Keith Byrne is the new strategic marketing manager of the team, after having worked eight years with the brand. He will be responsible for sponsorship programs and public relations in the EMEA region and will also deploy the brand’s new eco-friendly strategy in those markets. Erica Zambon saw her position as brand and marketing manager extended from the European market alone to the whole region. Promoted as brand and trade marketing manager for the EMEA, she will run brand advertising initiatives and manage trade and retail marketing, overseeing the graphics division. Byrne and Zambon, who both occupy newly created positions, will report to Lucia Zennaro, marketing director for the brand in the EMEA division.
Other new members of this team include Karen Williams, named product manager for Tekware and sportswear covering the EMEA regions. Sara Canali, who formerly worked with Williams in development, was promoted to development manager, taking over Williams’ former position. Williams and Canali will report to René Skytte, product director for the region. As we reported last year (SGI Europe No. 18/35-36), Skytte took the position as product director after working in a product management role at Adidas. He replaced Danny Harkin, who relocated to TNF’s US headquarters in San Leandro, California, becoming the brand’s international product director there.
Alexa Stampfer holds a new position for the brand as the team’s retail partnership manager to push for increased sales from partnership stores. She reports to Francesca Pozzi, the brand’s retail director for the EMEA markets. A final change concerns Leila Comin, the new retail merchandise supervisor, who previously worked four years with Stefanel
