Outdoor Leisure Business Accounted For 50%

As one of the largest apparel manufacturers in the world and the highest value clothing company in the US stock market, VF clothing, which has been established for more than 100 years, has maintained considerable business growth. Its revenues in the 2011 fiscal year were 9 billion 370 million US dollars, up 22.8% over the same period last year. Net profit of US $890 million, an increase of 55.4% over the same period last year. At present, VF clothing is already a multi category brand. Many brands of clothing companies have nearly 30 major brands. It is mainly classified into five major businesses:

1) outdoor recreation

2) jeans business

3) tooling / licensing business

4) sportswear business

5) new brand business

From the VF revenue breakdown diagram, the current outdoor leisure business accounts for nearly half of the total sales. This part of the business includes many familiar brands: The North Face, Vans, Timberland, JanSport and so on. Secondly, several major businesses: denim business accounted for 28.9%, the main brands are Wrangler and Lee; tooling / licensing business 10.8%; sportswear brand 5.7%; new brand business 5.1%.

This article will mainly introduce the basic situation and development of VF's five major business sectors.

　　 1. The basic situation of the five major sectors

1. outdoor leisure business

Outdoor sports is the fastest growing business of VF, including TheNorth Face, Vans, JanSport, and all the brands of Timberland company acquired by the company in September 2011.

The outdoor sports apparel brand The North Face is the largest brand of VF outdoor leisure business, which is now available worldwide. The North Face is mainly sold in outdoor stores and high-end sports products stores in the United States, and sells at 80 premium stores, discount stores and e-commerce website www.thenorthface.com. In addition, outside the United States, it also sells through The North Face stores operated by agents and distributors and 350 third party partners.

　　 Timberland In addition to the outdoor brand Timberland, the company also includes mountaineering apparel brand SmartWool, Timberland started with boots, and now products cover clothing, footwear and accessories. The products are mainly sold through 200 VF self run stores, e-commerce website www.timberland.com, and independent distributors, authorized dealers and cooperative store sales.

Vans starts with extreme sports and leisure footwear. Its products include skateboards, surfing, cycling and cross-country. The sales channels include 1) wholesale channels: national chain stores and professional skateboard stores, exclusive stores; and 2) retail outlets: 310 Vans full price and discount stores.

Shoulder bag brand JanSport, the main products include shoulder bags, bags and so on. JanSport is mainly sold through national department stores, national chain stores and sports stores. Meanwhile, JanSport sells T-shirts and T-shirts with LOGO at University bookstores.

Outdoor leisure business also includes backpacker brand Eastpak, travel bag brand Eagle Creek, wool dress brand SmartWool, outdoor dress brand Napapijri, surfing leisure dress brand Reef, female outdoor brand Lucy, and travel bag brand Kipling outside North America business.

2. jeans business

The brand includes Lee (founded in 1889) and Wrangler (founded in 1947), and its main products include shorts, casual wear, wholesale stores, VF's own stores and cooperative agents, as well as online channel sales. Other denim brands include Riders and Rustler.

Supplier's inventory management and retail space management of retail units give the cowboy many competitive advantages. Every day or every week, the company receives the SKU information of the style size color of each sales point. After that, the company delivers products according to the sales point information to ensure the customers' needs are met. The system will analyze the sales, demographic and geographical characteristics of retail customers, and then introduce products that are more in line with demand, maximizing the sales efficiency and inventory investment of the cowboy business.

The largest international market for jeans business is located in Western Europe and Asia. Over the past three years (2009-2011), the revenue growth of cowboy business in Asia has exceeded 25%. In the single India market, 2011 sales increased 45%. Then, in the US and European markets, the performance of jeans business is mediocre. (see two, financial situation)

3. Tooling / licensing business

Tooling business: the main brands of tooling business are Red Kap (more than 75 years old high-end professional wear brand), Bulwark brand (protective clothing for petroleum mining industry), Horace Small brand (law enforcement personnel and public security personnel dress), Chef Designs brand (food and beverage industry personnel). The business of the tooling business has a greater impact on the employment situation of the US industry and services. At the same time, the business uses the automatic distribution center with satellite system, which usually can deliver the goods within 24-48 hours after receiving the customer order.

At the same time, this business also provides customized online services to key customers, such as FedEx Corporation, AT&T, and some government departments, the United States Border Protection Agency, New York fire department, etc. Employees of these units can buy work clothes online. At the same time, this business is also the largest provider of non military clothing for the government in the United States.

Authorized business: mainly in the professional sports league, individual athletes or related organizations under the permission of the design and sale of sports apparel, including professional baseball league NBA and so on. Usually, after a few hours of super bowl and professional baseball, the related products will reach the retailers. In addition, the authorized business also includes authorization to produce garments for Harley-Davidson.

4. Sportswear business

The main sportswear brand is Nautica, which is sold through department stores, franchised stores, VF self run stores and e-commerce website www.nautica.com. This business operates more than 80 Nautica discount stores, which sell men's and children's and infant's clothing. Besides sportswear, they also sell men's coats, underwear, swimsuits and men's pajamas.

Another sportswear brand is Kipling (North American business). Its main products include handbags, suitcases, backpacks, handbags and other accessories. Kipling is also sold through department stores, specialty stores and bags retail outlets, VF self stores and e-commerce website www.kipling.com.

5. New brand business

The main brands of this business are 7 For All Mankind, men's wear designer brand John Varvatos, and high-end ladies sports brand Splendid and EllaMoss, which are located in high-end life. Clothing brand 。 7 For All Mankind is a high-end denim brand, with an average price of 155-245 dollars for a pair of jeans. 60% sales from the United States, the main sales channels are high-end department stores.

　　 Two. Basic financial situation of each business

1. Sales and growth

Outdoor leisure total sales increased by 42% in 2011, which increased by 31% in the US region and 63% in the international region, of which more than half of the growth came from the newly acquired Timberland company's contribution. The Asia region is outstanding, with a growth of 93% in fiscal 2011, of which more than 50% came from Timberland. Almost all brands of outdoor leisure business were strong, with two digit growth in 2011, while The North Face and Van grew by 21% and 23% in 2011 respectively.

In comparison, the second major business sectors Jeans Dress The performance of the business is relatively dull. In 2011, sales in the US region increased by only 4%, of which the increase in the price of single products brought about an increase of 8% in sales, but was offset by the decline in the sales volume of 4%. Among them, sales of Lee and wangler western in the United States increased by 8% and 11% respectively. The sales volume of international business in jeans business increased by 17%, of which 37% in Asia, two in Mexico, Canada and 37% in Latin America, and only 6% in Europe.

The sales of tooling / authorized business increased by 19% in 2011, mainly due to the dominant position of protective clothing and industrial uniform. The authorized business grew by 6%, mainly due to the continued growth of the National Football League authorized apparel business.

In sportswear business, the Kipling performance is outstanding. The sales volume of North American business increased by 56% in 2011, and Nautica sales increased by 5% in 2011.

Sales of new brand businesses in the US region and the international region increased by 11% and 8% respectively. The three brands of Splendid, Ella Moss and John Varvatos all gained two digit sales growth, and 7 ForAll Mankind sales increased 4% worldwide.

2. profit margin

Due to the increase of cost, the operational profit margins of various business sectors are challenged. Besides, the decline in operating profit of outdoor leisure business is also affected by the acquisition of timberland. Excluding the impact of the acquisition, the business profit margin of the business in 2011 was 19.7%, basically unchanged from 2010.

In addition, although the cost is increased, the profit margin of sportswear business is basically flat with that in 2010, mainly due to the increase in the proportion of Kipling sales, while the profit margin of Kipling exceeds the average level of this business.

The increase of new brand business profit margin was mainly due to 1) inventory sales decreased and stabilized 2. In 2010, there were 8 poor stores 3, and the same store had a strong sales performance.