The company will overhaul its brand portfolio, “enabling VF’s powerful brands”

The company will overhaul its brand portfolio, “enabling VF’s powerful brands”

US apparel giant VF Corp is to place more focus on supply chain demand and agility, digitalisation and investment in China, as part of a new five-year plan outlined today (30 March) by the owner of brands including The North Face, Timberland and Wrangler.

The 2021 strategic growth plan is designed to deliver "superior" returns to shareholders, VF has said in a brief outline of its strategy ahead of an investor meeting today. The aim, it says, is to address the quickly changing market landscape with a measurable goal of US$8bn in returns.

The company says the new strategy will focus on four foundational elements, starting with an overhaul of the company's brand portfolio and "enabling VF's powerful brands."

It will also look to transform to a consumer and retail-centric model, and elevate direct-to-consumer while prioritising digital. A distortion of investment toward Asia is also part of the strategy, with a heightened focus on China, the company says.

The five year plan to 2021 will be enabled by "amplified investments" and a focus on six capabilities: design and innovation; demand creation and brand experience; insights and analytics; retail excellence; demand and supply chain agility; and talent.

"Our 2021 strategic growth plan fuels our aspiration to consistently grow by creating amazing products and brand experiences that transform and improve the lives of consumers worldwide," says Steve Rendle, president and CEO. "VF has some of the most beloved and iconic brands in the world and a talented organisation that has the passion and commitment to thrive in a rapidly changing marketplace."

VF Corp is hoping to grow revenue at a five-year compounded annual growth rate (CAGR) of between 4% and 6%, fuelled by its largest brands the Vans, The North Face and Timberland, and the company's international and direct-to-consumer business platforms.

Gross margin is expected to reach 51.5% by 2021, while EPS is forecast to grow at a five-year CAGR of between 10% and 12%.

The company says it is also planning to change its fiscal year end to 31 March from the Saturday closest to 31 December of each year, in order to gain better visibility into revenue growth and expense planning.

"The strength and consistency of our largest brands and business platforms give me great confidence in our ability to achieve our targets," adds Rendle. "We remain sharply focused on our diversified value creation model, which is designed to deliver solid results across the many and varied business cycles and economies around the world."

In its latest quarterly update, VF Corp revealed a fall in both sales and earnings for the fourth quarter, with net income falling 15% to US$264.3m, while total revenues were relatively flat at $3.32bn from $3.33bn.

US Q4 in brief – G-III Apparel, The Finish Line, Oxford Industries