VF Corp. has a $2 billion goal for Asia.

This story first appeared in the September 20, 2012 issue of WWD. Subscribe Today.

Rapid growth in China and from The North Face brand is expected to pave the way for VF to more than double its Asia-Pacific business during the next five years.

At an investor meeting in Shanghai Wednesday, VF executives outlined plans to build sales in its APAC region, expected to reach $900 million during the current year, at a compound annual growth rate of 17 percent. Sales stood at $150 million in 2007 and, helped by both organic growth and the acquisition of The Timberland Co., have enjoyed a CAGR of 43 percent since.

“Our Asia-Pacific revenues have grown nearly fivefold since 2007 and we continue to see tremendous opportunities for growth in all our brands,” said Eric Wiseman, chairman, president and chief executive officer. “That’s the power of VF’s diversified global portfolio.”

Last year, VF projected APAC sales of $1.3 billion by 2015 as a part of its plan to hit $12.7 billion in overall revenues in four years. Those projections preceded the company’s acquisition later in the year of Timberland, which in 2012 will contribute about $270 million to Asia-Pacific sales, about 31 percent of the total in the area. Timberland’s overall contribution to VF revenues this year is expected to be about $1 billion.

VF in July projected sales of $10.9 billion for the current fiscal year, including Timberland.

China, not yet a $500 million market for VF, is expected to hit $1.2 billion in sales in five years, elevating its share of the APAC business to 60 percent from 51 percent this year and its store count, currently about 2,300, to about 6,000.

VF’s five biggest brands in the region based on current sales — Timberland, North Face, Lee, Vans and accessories brand Kipling — are slated for the strongest growth, led by North Face. The outdoor brand is expected to generate about $160 million in sales this year and more than triple to $500 million by 2017, elevating its share of VF’s APAC revenues to about 25 percent from its current level of 18 percent.

Second in projected growth rate behind North Face is Vans, expected to increase at a 22 percent clip to about $320 million from about $120 million.

While Timberland is budgeted to reach $500 million by generating $230 million in additional sales, its projected CAGR of 13 percent is half that of North Face.

Lee, currently VF’s second largest brand in the region with sales of about $200 million, is expected to grow to about $350 million, a CAGR of 12 percent that will see its share of APAC sales drop to 18 percent from the current level of 22 percent. Kipling will maintain its 7 percent share of APAC sales while growing at an 18 percent rate to about $135 million from about $65 million.

Overall, the five-year plan calls for a 17 percent CAGR. This year, growth in APAC is expected to hit 20 percent, with Europe expanding at what VF described as a “low double-digit rate.”

Karl Heinz Salzburger, group president of VF International, put the plans for Asia-Pacific into a holistic context for investors. “In 2012, we expect international sales to comprise about 37 percent of VF’s total revenues,” he said. “With the addition of Timberland and the continued strong growth expected in our Asia-Pacific and European businesses, we now believe international revenues could account for 45 percent of total revenues by 2017.”

China is by far VF’s biggest market in the region, with 2012 sales of about $460 million, about three times Japan’s $153 million in projected sales this year. While Japan is seen growing at 8 percent a year, expanding to about $220 million, China’s CAGR is projected at 21 percent as VF expands its retail footprint and seeks to further capitalize on the company’s portfolio of outdoor and action sports brands. India is expected to grow slightly faster, with a 22 percent CAGR, and expand volume to about $200 million from $72 million and its share of regional revenues to 10 percent from 8 percent.

VF said Wednesday that it would open a subsidiary office in Korea, where the company projects 2017 sales of about $120 million within five years.

VF has substantial wiggle room in the world’s two most populous nations, owning and operating its brands in China and last November acquiring full ownership of the joint venture the group formed in India with Arvind Ltd. in 2006.

Not surprising for a firm that generated nearly half of its sales through the Outdoor & Action Sports Coalition last year — the coalition accounted for $4.56 billion in sales last year, 48.2 percent of VF’s total of $9.46 billion — the company is particularly keen on opportunities to address the outdoor market. In a presentation by Bruno Feltracco, vice president and managing director of the coalition in Asia, the Chinese outdoor market last year was estimated at $1.7 billion at retail, with 40 percent growth over 2010. The broader “outdoor-inspired” retail market was about $4 billion. However, competition is fierce, with 574 brands competing for outdoor-related expenditures among China’s more than 1.3 billion population, according to VF.

Shares of VF Wednesday rose 20 cents, or 0.1 percent, to close at $160.73. They reached a 52-week high of $164.35 on Sept. 14.