Outdoor group VF Corp, owner of brands like The North Face and Vans, saw its turnover halved last quarter, but is very optimistic about the long-term future as outdoors, sustainability, casual wear and digital sales are on the rise.
Focus on Asia and online
In the quarter ending 30 June, VF Corp’s turnover dropped 48 % to 1.1 billion dollars (just shy of a billion euros) and its net result went from 49.2 million dollars above zero last year, to 285.6 million dollars (240 million euros) below.
Sneaker brand Vans was hit the hardest, with a 52 % turnover drop. The North Face lost 45 % in sales, while workwear brand Dickies kept turnover loss limited at just 16 %. Sales in Europe went down by 48 %, but Asian sales remained stable as China – largely already recovering from Covid in this quarter – had a 5 % rise.
First multi-brand store
CEO Steve Rendle sees in these results an opportunity to speed up his group’s strategy, which focuses on the Asian market and on digitisation – despite the challenges posed by Covid-19. VF Corp hopes to raise its sales in mainland China by a fifth, while online should grow by 40 %. In the past quarter, online growth was 81 % (excluding exchange rate fluctuations), which was even 90 % for the group’s four main brands (Dickies, The North Face, Timberland and Vans).
Offline expansion plans include opening the group’s first multi-brand store in Milan, to unite The North Face, Timberland and Napapijri. The store will also feature pop-ups by the group’s other labels, and an exclusive store for collaborations and limited-edition collections on the ground floor.
Epicentre of trends
Rendle’s main source for optimism, however, is the fact that his company is already rooted deeply in new trends that have started or sped up in the Covid-19 crisis, like a growing interest in the outdoors and a more active lifestyle. Moreover, the rising demand for sustainable fashion may also suit the Americans.
“We believe the portfolio we have today sits at the epicenter of the trends just outlined, and is poised to capitalize on these shifts. And our brands are uniquely positioned to not only benefit from these changes in consumer value systems but have the opportunity to drive and influence them”, Rendle told SGB.