VF Corp. is contemplating opening more full-price Timberland stores in the United States to coincide with the brand’s apparel re-launch next fall, CFO Bob Shearer told analysts at the Morgan Stanley Global Consumer & Retail Conference last week.
Shearer said VFC is ahead of plan in terms of identifying $35 million in costs reductions at Timberland. VFC anticipate Timberland’s operating margins will reach 10-11 percent this year, compared to the 8-9 percent range prior to the acquisition, which closed Nov. 14, 2011.
“We committed to a 15 percent operating margin by 2015, and we are absolutely on track to achieve that 15 percent target,” Shearer said.
Shearer’s remarks indicated the company’s outlook had not changed since it released its third quarter earnings late last month. It still expects The North Face revenues in China to grow at 26 percent CAGR through 2017. The brand’s Asian sales are now at about $160 million.
“TNF has the opportunity to actually define the outdoor category in China,” said Shearer.
In Europe, VFC expects low-double-digit growth rates despite a deceleration to 3 percent growth in the third quarter as dealers push deliveries into the fourth quarter. The company is spending more marketing dollars behind The North Face is already Europe’s largest outdoor brand, while Vans is already growing 40 percent a year in the region and the company is spending more money behind both brands in the current quarter.
“What we've seen is when we invest – when we focus on an individual country within Europe – put some marketing dollars behind it and really attack the region, we get great, great results,” Shearer said.
