VF Corporation has done some shuffling in its executive ranks. Karl Heinz Salzburger, vice president of VF and president of VF International as well as a member of VF's operating committee, has the new title of vice president of VF and group president, international. Steve Rendle, the 51-year-old president of VF Outdoor Americas, has been promoted to vice president of VF and group president, Outdoor & Action Sports Americas. In the new job, he will handle the North and South American operations of The North Face, Vans, JanSport, Eagle Creek, Reef and Lucy. Kevin Bailey, president of Vans, and Jeff Moore, president of Reef, will now report to Rendle.
Salzburger is widely expected to continue to play an important role in the search for takeover candidates. New acquisitions, especially in the outdoor and action sports sector, are still a top priority for use of cash at VF Corporation, and its management has indicated that some activity in that regard may take place in 2011. Addressing analysts at the annual ICR Exchange conference, it also disclosed a target of 40 percent of group sales being generated outside the U.S. by 2015, compared with 33 percent now.
It noted that the operating margins of its foreign activities are higher abroad than in the U.S. and that they generally work with lower tax structures. In China, where Vans is VF's largest brand, it already has an operating margin of more than 20 percent.
Higher growth in international markets, in higher-margin lifestyle brands and in direct-to-consumer activities should help the group to expand its gross margins in the long term. Higher sourcing costs will make that difficult in 2011, especially in the jeans sector. The higher input costs will be partly offset by lower marketing expenses than in 2010, when they averaged 5.6 percent of sales, with higher ratios for its growing outdoor and actions sports brands (more in The Outdoor Industry Compass).
