At the ICR Exchange Conference, VF Corporation’s chairman, president & CEO, Eric Wiseman, took the opportunity to review the radical transformation VF Corp. has undergone over the past decade and take a brief look ahead at 2010. He also pointed out three key pillars that VF has built its business model upon – a diverse and relevant portfolio of apparel brands that still have lots of organic growth runway in front of them; VF’s global reach with platforms in Asia, in Europe, and in Latin America have enabled growth for acquired brands; and margin expansion potential.

In 2009 for the first time ever VF’s outdoor and action sports business passed its jeans business as being the biggest part in the anchor of VF Corporation.  Outdoor and action sports accounted for 38% of revenue or about $2.8 billion. In 2000 that coalition did not exist.


Wiseman said that VF’s success as a portfolio manager comes from four key areas — strategic diversification; acquisitions and divestitures; superior brand management; and investing for growth. The brands that VFC has acquired over the past decade today represent $3.9 billion in revenue. The company has also added over 400 retail storefronts over the same period. Wiseman said that these retail stores are providing the company with 20% ROI today.

International is also a priority at VFC and it has grown 21% on a compounded basis over a five-year period: 16% in Europe, the Middle East and Africa and 52% in Asia-Pacific.

Looking at 2009, Wiseman said that VFC maintained “really strong growth” in the outdoor and action sports coalitions globally and gained share in the US market. VF achieved 25% growth in Asia-Pacific and accomplished the company’s 2012 target for the international business as a percentage the overall mix: 33%.


VFC also reduced the 2009 cost structure by $100 million and took over $100 million out of inventory. Wiseman said 2009 will be a record cash flow year.


Looking to 2010, VFC will invest in the outdoor and action sports businesses “significantly” as well as the China business while the company will continue to work at growing share in Europe.

Wiseman said that VF will also have disciplined expansion of its retail store format and intensify investment in e-commerce and digital marketing. The company will also increase significantly its investment in innovation, consumer insight and brand building and integrate those three things to get more consistent and faster answers.

Wiseman also highlighted a new initiative – VFC is going to develop and implement a global approach to sustainability.

While management did not say whether or not the pace of acquisitions would pick up in 2010, Wiseman did highlight the company’s acquisition requirements. VFC is focused on “really strong authentic lifestyle brands that are leaders in their space. The company wants aspirational and authentic brands with strong top-line growth potential that can be integrated into VFC’s international platforms. New acquisitions must also to be able to reach operating profit margin targets.