VF  President and CEO Bracken Darrell focused his ICR Conference presentation on January 13 on the company’s Big 3 brands, outlining how the Vans brand continues to find success with new product as it moves forward on its recovery, spelling out significant opportunities for The North Face to expand in the U.S., and hinting at Timberland’s ability to capitalize on the recent fashion revival in the Premium 6-inch boot. But it apparently came down to people.

Asked how he would assess the changes he has made to return VF Corp. to growth since he assumed the CEO role in July 2023, Darrell believes the company has notably benefited from the broad overhaul of its management team.

Darrell said, “We have changed a lot of leaders at the top. I did not expect to do that. It wasn’t because we didn’t have great people; we just didn’t have the right people in the right jobs. So, my leadership team, including our CFO, are new, and that’s had a couple of advantages. I’ve never done that before, where we changed that many people in the first year or so. But one of the advantages of that is, I think, it got everybody on the same page right away because they came in with the ‘Bracken Darrell sales pitch.’ So, there’s no problem getting people aligned on a vision for what we’re trying to do. That’s been really, really good.”

One regret, Darrell said, was not moving more quickly to reduce the number of Vans’ owned stores and its wholesale distribution to better rebalance demand. But he still feels good about the realignment in VF’s commercial structure, the refocus on elevated design and other changes to reset the company and remains upbeat on the VF opportunity.

Darrell said, “I’m super excited about this idea of creating a real multi-brand company that takes advantage of the fact that it’s got all these different places for learning and the ability to create best-in-class processes in each one of them.”

As an example of the benefits of a multi-brand organization, he noted that in two weeks, VF will hold an “academy” that will see 60 of its top personnel across brands gather to “train them in our culture, our values and what we’re up to. That’s just one of the many things that we’ll do. We’ll keep building out until all our key processes have a VF way.”

Vans Sees Strength in New Product

Providing updates on each of VF’s major brands, Darrell said that with Vans, he feels “the actions we’re taking feel right, and I think we have a lot of internal data that would say we’re doing the right things.” However, he admitted Vans has “yet to show up in the financial outcome of the business.”

Vans’ sales declined 11 percent on a currency-neutral basis in its latest fiscal second quarter ended September 27.

Citing lessons Darrell learned from the book “Atomic Habits” by James Clear, he noted that organizational changes often lead to incremental rather than overnight improvement and stressed that turnarounds take time. “You just have to keep doing the right things in the right way, and the right outcomes will follow,” Darrell said.

Among the wins the brand sees are momentum from Tier Zero products, which sell to the “very, very end of the market” and often lead trends. Darrell said many Tier Zero retailers are again showing strong interest in Vans. Said Darrell, “I’ve never quite seen anything like it where everything we launch up there just sells out almost immediately, or if it doesn’t sell immediately, it does well.”

Also encouraging for the Vans has been continued strong sales of the Super Lowpro, launched for back-to-school, with a follow-up second collapsible version “also doing very well.” Vans’ recent launches of a skate loafer, as well as embellished Old Schools and embellished Slip-Ons, have all “done really, really well.”

Darrell also noted that Vans should benefit from skate styles appearing on runways at recent Fashion Weeks. Said Darrell, “I don’t think it’s because skate is coming back into fashion, but whether it’s us or just an interest in that more flat-bottomed shoe, it just seems to be coming. So, I think, those are really good signs.”

The North Face Eyes Untapped Opportunities in the U.S. Market

Darrell said the biggest opportunity for The North Face is growing in the U.S. ‘I’ll probably be saying this for the next two years, but we’re underdeveloped in the U.S. relative to what we ought to be versus Europe or APAC,” he said.

Using a baseball analogy, Darrell believes The North Face’s growth potential is still in inning two, with the brand continuing to lag in reaching categories that typically sell better in spring and summer. Darrell said, “If you’ve followed us, you probably heard the same story for 10 straight years, and we don’t seem to have made much of a difference. We’ve grown the business nicely in The North Face, but we haven’t grown the business into the categories that are about more seasons.” However, Darrell believes the brand is taking the correct steps to become a more seasonal seller. He added, “I’m pretty confident that we’ll start to see really significant headway systematically over time, into those categories, which are going to drive more year-round business.”

Darrell also believes The North Face has bigger opportunities around “elevation,” or higher-priced product. He noted that the Summit Series, the most expensive range The North Face sells, continues to sell well. He said, “If we launch a leather jacket, like the leather puffer jacket that we did in the middle of last quarter, it sells for $1,100, and we sell out in Italy, in the U.S. and in China.”

Finally, Darrell said The North Face is eying a bigger opportunity for women. He added, “You might notice we seem to be shifting some of our marketing more in that direction. I think it’s going to work.”

The North Face’s currency-neutral sales grew 4 percent in the fiscal second quarter, with 2 percent growth in the Americas.

Timberland Looks to Capitalize on Yellow Boot Popularity

On Timberland, Darrell agreed that Timberland is having “a moment” with strong recent results, as the Original Yellow Boot has returned as a hot fashion item, and the team’s mission is to expand that into other categories.  Said Darrell, “The whole key there is that we define really well, ‘What are the silhouettes?’  ‘What are the products that we can move from just yellow boot momentum to momentum in other boots, momentum and other footwear, and even momentum in apparel?’ And we have a clear game plan for what we’re doing there and a terrific team.”

Darrell expects Timberland’s brand heat has also been boosted by strong marketing pushes, noting that many celebrities at this past weekend’s Golden Globes were wearing Timberland products. Darrell said, “I think we’ve probably never had a better marketing program than we have right now in Timberland.”

Another path to continue expanding sales for Timberland is to expand distribution. Darrell asked the investor audience at ICR, “If we ask, ‘Where are you going to buy your next pair of Timbs?’ You’d get a blank stare for many of you, especially if you don’t live in New York, because there’s really nowhere to buy it, and nowhere you would think of to buy it.”

SGB Executive noted that Timberland only has three owned-stores in New York City’s five boroughs and an outlet in Elizabeth, New Jersey. There was a time – when Foot Locker owned the Footaction chain – the Footaction store in the now-closed Eastland Mall in Charlotte, North Carolina was the No. 1 location for sales of the Timberland 6-inch wheat boot – and it wasn’t for the weather, according to comments from Shawn Neville, who was president of Footaction at the time.

Darrell said the brand will expand through wholesale accounts and by opening numerous stores. It only operates eight full-price stores.

Darrell said, “Most of the businesses are wholesale and outlets. So, we think, there’s a huge opportunity. Again, we’ll do it thoughtfully and methodically, but there’s an opportunity. And most of you know that if you strategically and smartly open stores, that also helps wholesale and online.”

In the fiscal second quarter, Timberland’s sales were up 4 percent, led by 11 percent growth in the Americas.

Image courtesy VF Corp. / The North Face Summit Series