VF Corp. will open three innovation centers — dedicated to new frontiers in technical apparel, footwear and jeans — during the first half of 2014.
The company will establish the technical apparel facility in Alameda, Calif., home of The North Face; the jeanswear center in Greensboro, N.C., home of the parent firm and the Wrangler brand, and the footwear base in Stratham, N.H., the home of Timberland. The centers will be staffed with teams of scientists, engineers, technical designers and other key talent.
Bob Shearer, senior vice president and chief financial officer of VF, told WWD that the centers are likely to be situated in buildings apart from VF’s existing physical plants. “This is in addition to the product-development people we already have working for our brands,” he said. “This is a bit longer term — looking down the road a few years — and, while ultimately this is all about generating revenues and improving our gross margin, we want the centers to be independent.”
He said the locations will lift VF’s corporate head count but that the exact budgets for them were still being worked out, as were the allocations of space and the precise reporting structure for each.
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Shearer said the centers are seen as providing a good deal of cross-pollination, with developments for one product category often being applicable to others, and that VF’s coalition and brand executives are expected to “commission” ideas to solve specific consumer needs.
“We’ve understood for a long time that consumers are willing to pay more for something that’s new and innovative,” he said. “Whether it’s the way that the product looks or the way it performs, innovation gets people to open up their wallets, especially in tougher economic climates.”
With 2012 sales of $10.9 billion and projected sales of $17.3 billion by 2017, VF is the largest U.S.-based apparel supplier and has been on something of an innovation tear for the past three years.
“In 2010, we first laid out our vision for the role that innovation would play in VF’s growth,” said Eric Wiseman, chairman, president and chief executive officer. “The move is critical to advancing our journey as it gives us a competitive advantage in the apparel industry. We will fully leverage what we learn by sharing output from the innovation centers across our 30-plus brands.”
At the same meeting, Stephen Dull, VF’s vice president of strategy and innovation, said that ideas developed since the 2010 innovation commitment have already resulted in $400 million in annual sales and are seen expanding to $1.6 billion in revenues over the next three years.
Among recent innovations already launched or about to be shipped are Flash Dry and Thermoball moisture-management products from The North Face, Lee’s Shapetastic offerings, Wrangler’s modification of its MWZ 13 cowboy jeans, Slim Illusion technology at Seven For All Mankind and fire-resistant apparel with better comfort characteristics in its Bulwark career apparel assortment. Although principally dependent on third parties for production, VF manufactures about 500 million units a year and operates 32 plants of its own.