VF Corp. focuses EMEA retail expansion plans on London, Milan
VF Corp's commitment to the environment is emblazoned across the tiled floor of the entrance to its European headquarters, in large blue letters: “We power movements of sustainable and active lifestyles for the betterment of people and our planet.”
It made for an eyecatching first impression for the handful of European journalists invited to VF Corp.’s Stabio offices on Tuesday October 8, where FashionNetwork.com heard more from the group, the owner of Vans, Eastpak, Timberland and Napapijri, about its plans for sustainable manufacturing (one of the mainstays of the group’s new strategy), about its worldwide expansion and its strategies in Europe.
VF Corp. is worth an annual revenue of $11.8 billion (up 12%) and its growth drivers are clearly defined: powerful brands, an increase in the number of monobrand stores, and strengthening the group's position on Asian markets, where growth prospects are enticing.
“First of all, our brand portfolio is now more coherent and more efficient, since we sold our denim labels Lee and Wrangler. Then, there is the expansion of our presence in Asia: for the time being it’s the smallest region in volume terms, but it has the highest potential growth rates. Thirdly, B2C sales have become essential for us, while previously we only sold through the wholesale channel. Even if we don’t regard ourselves as retailers, over 50% of our current investment is linked to our B2C business in the broader sense. This notably hinges on our digital platform, which manages the business across the entire supply chain for all our brands, as well as on fostering the customer experience and on the training and hiring of personnel, among other things,” said Martino Scabbia Guerrini, executive vice-president and president EMEA for VF Corp.
In a press release at the end of September, Steve Rendle, CEO of VF Corp., released the first details of the group’s strategy and main international priorities from now to 2024.
Yesterday, Scabbia Guerrini outlined the goals and specific objectives for the EMEA region, where VF Corp. is targeting a CAGR comprised between 6 and 7% from 2019 to 2024. The increase will be driven by Germany, Austria and Switzerland, where growth is expected to range between 10 and 11% in the period.
EMEA growth forecast between 6 and 7% in next five years
France is expected to increase by between 7 and 8% in the next five years, while the UK and Spain should both be growing by between 5 and 6%. Growth in Italy is forecast to be weaker, between 2 and 3%, while the other markets in the region have a growth forecast comprised between 6 and 7%.
To drive expansion, VF Corp. is planning to extend its retail footprint in Europe’s largest cities. Its two main targets, for the time being, are London and Milan. In the former, two new stores will be inaugurated in quick succession. On Thursday, a huge flagship will open on Oxford Street, one of the brand’s largest stores worldwide. In November, it will be Timberland’s turn to open a flagship, this time on Carnaby Street. It will be the first EMEA store for the brand featuring the new interiors concept. After these openings in London, VF Corp. will provide further news about its projects for Milan.
As for Paris, VF Corp.’s feeling isn’t one of disillusionment but rather wariness. The group has in fact been stung by the consequences of the ‘yellow vest’ protests. “We had to close some of our stores, and also our concessions inside department stores, for several week-ends in succession. With no compensation. Sales were badly affected. Having said this, we do love Paris. We’re aware it is a key city for visibility, fashion and business. But for the time being we have enough of a retail presence within it,” said Scabbia Guerini.
In parallel, Scabbia Guerrini indicated that the group’s brands are forging closer links with leading clients, creating genuine partnerships with them. Among the most important ones, he mentioned JD Sports, Foot Locker and Intersport, as well as department stores like El Corte Inglès in Spain and Coin in Italy. “We learn a great deal from these chains, which regularly come here to visit us. They have an ultra-dynamic approach towards the transformations taking place in the retail trade, and often ask themselves how to innovate and go further. They also have every interest in working with highly appreciated brands like ours, which generate added value for them,” said Scabbia Guerrini.
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