TNF passes $3bn but VF 'not happy' with Vans
20/05/2022
Five of its brands, representing 70% of revenue, reported record sales, led by “incredible growth” at The North Face (TNF).
TNF revenue grew 32% for the year, surpassing the $3 billion milestone and the third quarter recorded $1 billion in sales – the biggest quarter in its history.
Its footwear business also grew at nearly 19%, driven by a combination of VECTIV, insulated boots and more traditional hiking shoes.
Its outgoing president, Steve Murray, who is being replaced by Nicole Otto, said the company will continue to invest in its "365-day product strategy, essentially an initiative to extend our product assortment beyond snow sports and cold weather product to provide apparel, footwear and equipment our consumer uses all year long".
Timberland grew revenue by 20% in fiscal ‘22, representing growth above pre-pandemic levels. Clothing now makes up almost 20% of sales.
Italian footwear brand Altra grew 57% versus fiscal ’21 and 84% versus fiscal ‘20, driven by elevated products, and marketing and marketplace management coming together under a new leadership team. “We are confident the brand will continue to increase share in the specialty running segment and is well positioned for continued strong growth in fiscal ’23,” said VF CEO Steve Rendle.
Smartwool’s revenue grew 40%, driven by an expanding apparel business, which represents about half of sales.
New Zealand’s Icebreaker generated near-record revenue in fiscal ‘22 and moved its headquarters to VF’s European headquarters in Stabio, Switzerland.
However, VF is “not happy” Vans, which, despite growing by 19%, was affected by covid lockdowns in China and slower sales in its core segment, Classics.
Kevin Bailey, who has been brought back in as brand president, having left in 2016, said there was a plan to address the problems. “Our Vans leadership is not happy with our recent performance. The team does not like to underperform. And I have total confidence in the brand’s long-term growth potential as evidenced by fiscal ‘22 being a record-setting year in terms of top line revenue.
“We will drive greater product and marketing relevance, building off of our refreshed understanding of the consumer. Classics will continue to drive growth, but with a greater emphasis on style adaptations of our five classic icons.”
Group-wide, the zero tolerance policy in China in response to covid-19 is impacting some raw material suppliers but most manufacturing and assembly suppliers are back to normal operating levels. Continued port congestion, equipment availability and other logistics challenges have contributed to delays but the group is employing expedited freight as needed.
Mr Rendle said: "We will continue to thoughtfully invest in our brands and value-enhancing strategic growth opportunities and I am confident VF has a long runway for sustained, profitable and broad-based growth ahead.”
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