Today we visited VF Corporation in Geensboro, where they focused on jeanswear. VF was origanized in 1899, and is a worldwide leader in branded lifestyle apparel, footwear, and related products. VF’s 5 largest brands are The North Face, Vans, Timberland, Wrangler, and Lee which bring in over 1 billion in revenue each. They have nearly doubled their revenue in the past seven years and in 2012 they brought in 10.9 billion dollars in revenues, and the operating income was 1.5 billion dollars. They are a highly diversified company with 25% of sales through e-commerece or owned stores and 40% of sales outside of the US. Jeanswear and Imagewear are heritage brands with strong levels of profitability and cash flow but lower growth rates. When it comes to production, VF produces 28% and sources 72% of its roughly 450 million units annually across 36 brands. They have 29 manufacturing facilities and nearly 1900 contractors in 60 facilities.
The mission statement of VF Corporation is “We will create the leading jeans and lifestyle apparel company in North America by offering our customers branded product solutions at compelling value.” This is what makes a company so successful, and VF has done so. They have to supply so many different customers that they have to be on their game and that leads to them bing names the world’s largest jean producer. The supply chain has its own goals which are: growth, speed, service, cost, GM, asset efficiency, innovation and sustainability.
There are so many different customers of VF, but they have a Big 3 marketing units. 1. Walmart, Target and K-Mart 2. Kohls, Sears, JC Pennys and Macys 3. Tractor Supply and Boot Barn. These are just some of the big names, but anywhere their 36 brands are sold, they have obtained those products from VF. The catch here is that many of these companies they sell to, do not want a product in their stores that the other stores have. For example, Target does not want to sell a certain style of jean if Macys is selling the same style.
The customers of VF are very much like those of other companies we visited, for they value high quality product. The difference between VF customers and others are that they want this high quality product at a low cost. This is hard to do, because high quality is expensive, but VF has found a way to make both possible and that how they have become so successful. One way that this is done, is the fact that their biggest producer is Mexico at 22% and china at 21%, this is one way to reduce cost but still get a high quality product.
The results speak for themselves with VF, for they are the largest jean producer in the world. They bring in just under 11 billion dollars in revenue, and they plan on seeing increases in the future, and are projecting for revenues around 17 billion in 2017. The VF in Greensboro brings in 2.2 billion dollars in revenues and moves 175 million units per year. 60% of their products are internally produced and 40% are sourced.
The plan for the future is to keep growing, but the problem is that they are a slow growth business. They want to make revenue faster, by expanding distribution and getting into more stores. They also have a future 5 year plan of where to play: core businesses, lifestyle brand extensions, direct-to-customers, new wholesale accounts and channels, and finding and targeting new customers. This is a lot to work towards in the future, but it seems more than plausible, for the fact that VF doubled its revenues in only a seven year span. VF Corporations has found itself at the top of the jeans and lifestyle sales world, and they do not seem to see an end to their empire.
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