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Kontoor Brands is working toward an era of denim dominance

In the two years since its spin-off from VF Corp. was complete in May 2019, the retailer’s Wrangler and Lee brands have grown, making more inroads at major U.S. retailers and raising their international profile, its executives said. 

Emboldened by the company’s top-line growth in recent quarters, and optimistic about a demand for a more casual wardrobe even after many white-collar workers are expected to return to the office this fall, the denim company outlined its vision to invest in its Wrangler and Lee offerings, expand in China, and grow its digital revenues.  

“A lot has transpired over these past two years: from global trade conflicts, to the COVID-19 pandemic, to the disruption of global supply chains,” Kontoor Brands Inc. chief executive officer Scott Baxter said at the company’s virtual investor day conference on Monday.

“Yet our incredible teams around the world have remained focused on taking care of one another, leaning into our values and on executing with excellence,” he said.  

Most of its business, roughly 75 percent, is based in the U.S., but the company has ramped up its investments in China, vying along with other U.S.-based firms for the attention of a large mobile, and young market there for streetwear and stylish casual apparel. 

“We believe we have tremendous opportunity to continue to globalize these iconic brands,” Baxter said. “We’ve made critical investments since becoming an independent company, in both Europe and Asia, to upgrade our capabilities in these critical markets.”  

The conference follows what the company described as a successful soft launch of Wrangler in China in December, which will pave the way for the company to expand the brand there. The Lee brand, already a presence in China, has strengthened its offerings there over the last two years, cementing its label in that market as a “premium lifestyle offering” with elevated price points, where some of its priciest jeans retail for more than $230. 

Kontoor is also gearing up to expand its overall digital offerings, a strategy increasingly embraced by retailers during the super-charged online shopping era of the ongoing COVID-19 pandemic. Since the spin-off, the company’s digital wholesale business has grown through tie ups with retailers including Amazon, walmart.com, and kohls.com, Kontoor said. In China, the company also relaunched Lee’s X-line, its digital only collection. 

Kontoor said plans to grow its digital business from 5 percent of revenues in 2020 to 10 percent by 2023, an increase that would involve bringing in more than $150 million in incremental revenue, according to the company. 

“The consumer shopping journey takes place in a broad and dynamic ecosystem across content, search, shopping and social media,” said Chris Reid, vice president of global digital at Kontoor Brands. “As we invest in digital channels and capabilities, we look across the ecosystem at how each touch point can drive improved results across channels,” he said.  

The company also has plans to expand its category offerings in areas including outdoor and fishing apparel, graphic T-shirts, women’s apparel and hybrid work and casualwear for what it hopes will be a feature of customers’ eventual post-COVID-19 wardrobe. 

“We call it work-leisure,” said Chris Waldeck, global brand president, Lee. “It’s your off-duty wardrobe, combined with elevated fabrics and sophisticated designs, engineered with Lee’s legendary fit and comfort. We are ready to answer what’s next.”