VF Corp to open 100 new stores in 2011
08/03/2011
"A big change for us in 2011 is that the mix is going to shift from being primarily domestic doors to primarily, I'd say about 60% will be opened outside of the United States," said VF Corp CEO Eric Wiseman. "The reason for that is the strength of the operating performance that we're now achieving in our international stores."
For 2010, VF's revenues climbed 7% to $7.7 billion, and net income jumped 24% to $713.2 million.
VF's direct business, meaning products sold through its own stores rather than through other retailers, contributed strongly to the company's successful quarter and year. Direct revenues increased 13% for both periods, and now accounts for 18% of total revenues. VF currently operates 786 stores, having opened 85 in 2010.
VF executives are optimistic about the company's prospects for 2011. Wiseman cited its internal manufacturing capabilities concentrated in the western hemisphere, combined with a "highly diversified and balanced base of contractors managed from one of the largest sourcing offices in Hong Kong, which provides us with tremendous scale and expertise. We can adjust our sourcing strategies fairly quickly given the strength of our global supply chain to ensure we're taking advantage of the best value in the market at any point in time," he said.
The key challenge for the company will be higher prices for raw materials. CFO Robert Shearer noted that VF's overall product cost will be up roughly 7% in 2011, "driven primarily by the well-documented and unprecedented increase in cotton prices."
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