VF Corp. likes what it’s seeing in its jeanswear business.
“Our jeanswear business today is in really good shape,” Robert Shearer, senior vice president and chief financial officer of Greensboro, N.C.-based VF, told participants at the Morgan Stanley Global Consumer and Retail Conference in New York Tuesday.
He noted that while the company’s two $1 billion-plus denim-based brands, Lee and Wrangler, might lack the excitement of “the next fabrication for The North Face that takes climbers to the top of Mount Everest,” they continue to generate “very, very healthy margins and a lot of cash for us.”
VF’s jeanswear coalition, home to the two brands, “has been as successful in our innovation platform as any of our businesses,” he said, even if those innovations have been more focused on comfort and fit than fabrics and construction details engineered for the Himalayas.
The focus on innovation within jeanswear has helped the coalition pick up $100 million to $150 million “of revenues that we wouldn’t have otherwise had,” Shearer said.
VF also has benefited from its decision to position Wrangler’s western business as a separate unit which, according to the cfo, “has delivered 10 consecutive quarters of strong revenue growth.”
The jeanswear unit remains challenged by weakness in Europe, which, despite strength in other parts of the world, was substantial enough to push its third-quarter revenues down 1.2 percent, to $718.8 million, despite a 1 percent increase at constant currency. Third-quarter operating profit at the division moved up 19.8 percent to $131.4 million, and profit for the first nine months of the year was up 2.6 percent to $335.6 million, while sales were up 1.7 percent to $2.05 billion.
“We spent a lot of time last year talking about the impact of cotton on our margins,” Shearer recalled, “and I’m happy to say that these businesses are absolutely back on track.”
Specifically, operating margin — operating profit as a percentage of revenues — has rebounded strongly as cotton prices have returned to less inflated levels. Jeanswear’s operating margin reached 18.3 percent in the third quarter, higher than either the figure for the nine months (16.3 percent), all of 2011 (15.1 percent) or even 2010 (17 percent).
“The year is playing out really pretty much as we had planned, if not even a little bit better in terms of profitability within our jeanswear business,” Shearer said. “The jeans margins are returning to more normalized levels and you absolutely see that in this fourth quarter when our operating margin will be in the high teens.”
Shearer commented briefly on Rock & Republic, the jeans brand acquired in early 2011 for $57 million in cash out of bankruptcy. “It’s a brand that’s done really well for us and our wholesale partner Kohl’s,” he said, without divulging financial details.
Turning to Timberland, acquired last year, Shearer said the brand, part of the company’s dominant Outdoor & Action Sports coalition, is on target to generate full-year revenues of $1.7 billion and operating margin of between 10 and 11 percent while adding $1.10 to earnings per share. He added that VF expects to exceed the target for $35 million in cost reductions. Timberland apparel is scheduled to be launched in fall 2013. Full-price retail stores and annual growth of 30 percent a year in China are also on VF’s agenda for the brand.
Last year, VF generated net income of $888.1 million on revenues of $9.46 billion.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)