VF Corporation (NYSE: VFC) hosted a meeting last Friday in New York for analysts and investors to discuss the company's recently announced acquisitions, including The North Face, CHIC, Gitano, H.I.S, and Eastpak.

Senior management from VF reviewed the strategy behind the acquisitions, as well as VF's short-term priorities and long-term opportunities with each of the newly acquired brands.

"VF continues to put in place the brands and capabilities to be the largest, most consumer responsive apparel company in the world," said Mackey McDonald, chairman and chief executive officer. "We look forward to reaping the benefits from the investments we've made in our consumerisation strategy over the past several years."

During the two-hour session, Mackey McDonald outlined VF's action plan intended to drive the company's future performance and add shareholder value.

Acquisition update
"Our recent acquisitions should provide terrific opportunities for VF, both strategically and financially," said Mr McDonald. "Our first priority is to ensure solid sales growth from acquisitions by capitalising on the superiority of our brands and leveraging product through our distribution channels. These brands enjoy strong market positions in their categories and fill areas in our portfolio that we have targeted for growth. At the same time, we intend to restore profitability to The North Face and improve margins in the CHIC, Gitano, H.I.S, and Eastpak businesses.

Mr McDonald continued, "With approximately $320m invested in acquisitions this year, we anticipate annualised sales from the acquired companies to reach $640m by 2003. We continue to anticipate a turnaround in profitability beginning next year, bringing overall operating margins of these businesses over the next two to three years close to our corporate average."

VF's action plan
Management discussed the following short-term objectives that should position VF for solid performance over the next several years:
  • Complete the integration of recent acquisitions
  • Aggressively contain costs
  • Tightly control inventories
  • Continue "best practice" process and systems implementations
  • Re-evaluate asset efficiencies
  • Resume share repurchase program.


Long-term, VF intends to maintain its competitive advantage and enhance its long-term growth platform through the following initiatives:
  • Building marketing support to drive core businesses
  • Reaping benefits from "best practice" process and systems implementations
  • Continuing to evaluate significant strategic acquisitions
  • Exploring tax savings strategies
  • Continued share repurchases


Enabling growth through reengineering
New processes and systems are being implemented to support the company's growth, cost reduction and speed to market targets. Since 1995, over $200m has been spent in state-of-the-art technologies and "best practice" processes, with an additional $70m in capital investment. "We are beginning to see the payoff from these investments," Mr McDonald continued. "New planning and forecasting tools, such as Logility and i2, are also giving us greater visibility throughout our entire supply chain, helping to decrease cycle times, inventories and costs."

Share repurchase program
During the meeting, management emphasised the company's commitment to a continued share repurchase program. "Our strategy is to balance our free cash flow of approximately $250m annually between share repurchases and acquisitions. We recently resumed our share repurchase program and plan to continue to buy our shares through the fourth quarter and next year," Mr McDonald concluded.

About the company
VF Corporation is the world's largest apparel company and a leader in jeanswear, intimate apparel, knitwear, workwear, playwear, daypacks and swimwear. Its principal brands include Lee, Wrangler, Riders, Rustler, CHIC, Gitano, Vanity Fair, Vassarette, Bestform, Lily of France, Lee Sport, Healthtex, Jantzen, JanSport, Eastpak, Red Kap and The North Face.

VF Corporation's press releases, annual report and other information can be accessed through the company's home page on the web, www.vfc.com.