WISEMAN’S GLOBAL PLAN FOR VF
Byline: Karyn Monget
NEW YORK — VF Corp. is looking to grab a larger share of the intimate apparel business this year by implementing an aggressive initiative of ideas planned to drive global growth, maximize value with its Consumer Reaction System and leverage technology for growth in all channels of distribution.
That’s the word from Eric Wiseman, vice president and chairman of VF’s global intimates business, who recently hosted the apparel giant’s first in a series of “Lunch With VF” conference calls with analysts, investors and the media. The session was introduced to keep shareholders and the financial community abreast of VF brand and marketing initiatives.
Among the key strategies will be an intensified focus on what Wiseman calls “attitudinal segments” of different consumer groups, rigorous management of retail inventories with advanced vendor-managed systems and consolidated retail teams, and shortening the pipeline, while improving quick response.
VF’s vendor-managed retail floor space has apparently paid off at J.C. Penney, where Wiseman said sales of VF intimates, primarily its Vanity Fair brand, increased 55 percent over the past year. He added that VF plans to grow sales using ethnically targeted products, such as a Vassarette panty program introduced last month at Wal-Mart, that are aimed at Hispanics.
The company is also actively looking to complete “strategic acquisitions and launch new brands to fill gaps” this year, said Wiseman. “We absolutely have our eyes open for acquisitions.”
Intimate apparel is VF’s second-largest line of business after jeanswear, representing 17 percent of its $5.5 billion volume in 2001. A broad portfolio of brands at three business units that employ 15,000 people — Vanity Fair Intimates in Atlanta, Bestform Intimates in Manhattan and VF International Intimates in Barcelona, Spain — include the Lily of France, Vassarette, Vanity Fair, Bestform, Lou, Bolero, Gemma and Exquisite Form proprietary brands, and the Natori, Nike and Tommy Hilfiger licensed lines.
While the $8.5 billion bra and panty industry is beginning to improve following a 5 percent drop in sales in 2001, Wiseman said, “I expect we’ll outperform the category by several points.”
The Greensboro, N.C.-based apparel maker sold some 32 percent of all bras sold by mass merchants in 2001, up nearly 3 percent from 2000, Wiseman said. He further noted that VF is a “growing number three” supplier among department stores and chains, after Sara Lee and Warnaco.
VF’s share of the bra business at department stores and chains, which includes private label, grew about 25 percent last year. Wiseman acknowledged that “revenue declines” from competitors such as Warnaco, which filed for Chapter 11 bankruptcy protection in June 2001, opened up opportunities for VF to carve out a bigger share of the market.
“While we are large there, we think we can continue to grow in that channel, and we think that channel will continue to grow,” said Wiseman, noting that the mass Vassarette brand was introduced to the Carrefour discount chain in France this year.
According to NPD FashionWorld, a consumer research firm, VF’s market unit share from 2000 to 2001 at department stores rose 2.9 percent, 3.3 percent at chains and 0.8 percent at discounters. However, the sour retail climate has impacted the Vassarette business, particularly at the beleaguered Kmart, one of the brand’s key merchants.
“The Vassarette brand experienced a decline in business last year and this year, but we are working hard to get it back next year,” said Wiseman.
Among the key strategies outlined by Wiseman was targeting consumers in the U.S. market who represent seven different profiles: the intimate apparel enthusiast, the budget-minded enthusiast, the confidence projector, body-confident brand seekers, women who prefer casual and natural lingerie, figure “acceptors” and those who are not fashion conscious and look for function.
“Each consumer has distinct and understandable needs,” Wiseman said. “Driven by our Customer Reaction System, we work very hard to be innovative.”
He noted that the X Bra by Lily of France, which is positioned as “young, fun and sexy” with marketing tag lines like “Unite and Conquer” and “Pull Together Your Breasts,” has been a hit with the intimate apparel enthusiast. The Illuminations by Vanity Fair bra, positioned as “confidence through femininity,” fulfills the desire of a consumer “who wants fashion, wants to look her best, and is willing to pay for brands,” he said.
The Lily of France bra brand, which is geared to the intimate apparel enthusiast, had a 33 percent annual compound growth rate from 1999 to 2001, while the Vanity Fair foundations brand grew 9 percent compounded annually. Both brands are distributed to department stores and specialty operations. The licensed Tommy Hilfiger line of bras and panties saw sales skyrocket 50 percent in 2001 from the previous year when it was first introduced.
In Europe, Wiseman said VF is building local and global brands simultaneously, where the Lou, Variance, Vassarette and Vanity Fair brands comprise 47 percent of sales in France, the Gemma, Belcor and Intima Cherry labels in Spain generate 37 percent of sales and Exquisite Form does 7 percent in the U.K. Overall, 75 to 80 percent of VF’s intimates business is generated in the U.S., he said.
He said a big push is being given to sharing product innovation globally. A successful example is Reargear by Lily of France, a thong introduced to American department stores last year that’s meant to be seen above low-rise pants, and the launch of a similar style by Variance this spring at French hypermarkets.
Wiseman also addressed the issue of offshore sourcing and production, noting that manufacturing in Asia had increased to 41 percent in 2001, compared with 23 percent in 1998. Production in Mexico decreased two points to 32 percent in the year and diminished four points to 27 percent in the Caribbean Basin.