Newsworthy reports are coming in on 3rd quarter results, particularly for VF Crop, the large conglomerate that owns Wrangler, Lee, The North Face, and Vans -which makes up 60% of total revenues for the company. VF Corp. announced on Monday, that revenue had declined 5% for the 3rd quarter, however if you look at the break-out of performances per brand, it’s quite an interesting story of where market opportunities exist.
“Our relentless drive to control costs, reduce inventories and focus investments on our highest return opportunities has served us very well during these difficult and volatile times. We will continue this disciplined approach through the balance of this year and into 2010 to maximize opportunities for both top and bottom line growth,” reported Eric C. Wiseman, Chairman, President and Chief Executive Officer. The brands that were the strongest for the company were the aforementioned brands, as well as Nautica which did surprisingly well also. Global revenues of The North Face and Vans brands grew 10% and 4%, respectively, which is much more than many other fashion and footwear brands can announce.
Direct-to-consumer business is a key area for Vans and the North Face and 7 for All Mankind with an increase overall of 6% in the quarter. As we’ve written about in Retail Revolution, among other stories, this remains an area of growth opportunity for brands. Other areas include tapping into the Asian market, as indicated with growth in these areas for Vans and The North Face.
What didn’t far too well was denim, especially in Europe, which has been hit hard by the economy and has been uniquely reflected in decreased premium denim sales. Over, VF Corp.’s denim was down 10%, however there remains strong growth once again for Wrangler and Lee in Asia where revenue rose a significant 17%. Authentic Americana again proves quite powerful in Asian markets which is a trend we predict will continue for another year.
With their specialty brands such as John Varvatos and 7 for All Mankind, there was a decline, particularly as seen in sales overall of upper urbanwear and specialty stores catering to this genre.
Overall, VF, like many other global brands, are looking to increase revenue in the 4th quarter with new store openings and growth in other areas, particularly direct-to-consumer and international business in Asia.