For VF Corp., fashion technology is less about a wearable-tech device and more about performance.
“Consumers are asking for performance-quality apparel and footwear, which is the big news today. They absolutely want it,” said Eric Wiseman, VF’s chairman and chief executive officer.
Given the group’s focus on outdoor and action sports — the segment posted $1.6 billion in first-quarter revenues — it makes sense that VF would want to be at the forefront of innovation in areas where performance fabrications provide benefits to the end user.
“We are working through colleges and universities, consortiums we are a part of and inside our innovation centers. We have a lot of proprietary work that we are getting patents for,” Wiseman said.
The company owns and operates three Global Innovation Centers, all in the U.S. The Jeanswear Global Innovation Center is located in Greensboro, N.C., the Performance Apparel Global Innovation Center is in Alameda, Calif., and the Footwear Global Innovation Center is in Stratham, N.H.
VF made innovation a priority as part of its Innovation Agenda, an initiative it began in September 2010.
One product — Jade Fusion — is already used in jeanswear sold in China. Crushed mineral jade, which is there to help cool the wearer in hot climates, is embedded in the fabric. Another innovation in the test phase is Magna Fusion that uses the same concept with igneous rock, but this time to hold in heat.
According to Wiseman, there are about 50 to 60 people working in the three centers. “At least half have Ph.D.s. They are all researchers,” he said.
Wiseman also noted that he and his leadership team were in China two weeks ago, a country that remains VF’s biggest growth opportunity. “Maybe [China] isn’t growing as quickly as it was five years ago, but the government is [projecting] GDP [gross domestic product] at 6.5 percent, and they control the [levers] to pull to make that happen. What does that mean for us? The middle class is evolving. There are hundreds of millions of Chinese consumers today who can’t afford our products,” Wiseman said, adding that these same consumers will be able to buy VF products as they join the middle class.
VF’s brands in China are sold through Tmall, although the brands have sites that are content-focused.
The company on Friday posted a 9.9 percent decline in first-quarter profits to $260.3 million, on total revenues that were essentially flat at $2.84 billion from a year ago. The company also reaffirmed 2016 guidance from February when it reported fourth-quarter results.
The strength in the quarter was from VF’s direct-to-consumer business, which was up 8 percent on a constant currency basis and included a low-single-digit comp.
VF, whether online or in its stores, is able to flow merchandise according to local consumers’ preferences and needs. “If we see winter weather coming to Boston, we can in advance put [cold outdoor] product there in anticipation of bad weather,” Wiseman said.
Each brand has its own strategy for moving product and opening stores. “Each brand is looking at where they have customers. People buying online where we don’t have a store suggests permission for us to connect within a city. We go where there is opportunity and build around that,” Wiseman said.
The ceo gave as an example Vans, which moved up the Eastern Seaboard with nine stores outside of Manhattan before opening a unit in the city. From there the brand moved to Boston, Philadelphia and now has a store in Chicago.
The brands each also have their own strategy for selling into each channel of distribution, even when selling through Amazon. “The stuff they are selling is a curated assortment for what is most productive for them and for us,” Wiseman said.