Going direct: VF shows retailers how to grow

After opening 75 stores in the fourth quarter and with expectations for 150 units this year brand powerhouse VF Corporation has emerged as one of the nation’s fastest growing retailers.

VF is best known for brands such as The North Face, Vans, Timberland, Wrangler, Lee and Nautica that are sold through other retailers. However, rapid store expansion in recent years has seen the direct-to-consumer business steadily account for a larger percentage of sales.

That was the case in the fourth quarter when VF added a record 75 units, compared to 53 stores in the fourth quarter the prior year. Store openings accelerated throughout the year with 23 units added in the first quarter, 41 in the second quarter and 49 in the third quarter. The additional selling space drove a 25% increase in sales and caused the direct-to-consumer business to account for 32% of fourth quarter revenues of $3.6 billion. That’s up from 29% in the fourth quarter the prior year and on a full year basis the direct-to-consumer business accounted for 26% of revenues of $12.3 billion, versus 22% the prior year. “Our powerful brands and the competitive advantage of our business platforms combined with our relentless focus on operational excellence delivered another year of strong returns for our shareholders,” said Eric Wiseman, VF chairman, president and CEO.

“Our four largest brands – The North Face, Vans, Timberland, and Wrangler – along with many of our other brands, were strong performers as we grew our business in every region and channel around the world.” VF ended the year with a total of 1,401 locations and with another 150 units planned for this year the direct-to-consumers business is expected to account for 28% of the company’s full year revenues. The additional selling space will help, but VF said it is also counting on an unspecified level of same store sales growth and a 30% increase in e-commerce.

“2015 will be another great year for VF. Our fundamentals have never been stronger and despite the strength of the U.S. dollar, which will continue to pressure our reported results, we expect meaningful growth in every region around the world,” Wiseman continued. “Our consistent and proven, powerful-brand, powerful-platform approach to business gives me tremendous confidence in our ability to further increase competitive separation for our brands and provide sustainable, long-term returns for our shareholders.”