American apparel group VF Corporation plans to reach US$2 billion in revenue from its Asia Pacific business over the next five years – double its current sales.
VF aims to add US$1.1 billion in revenue by 2017 in Asia Pacific, primarily through growth from its five largest brands in the region – Timberland, Vans, Lee, The North Face and Kipling. This represents an annual growth rate of 17 per cent from 2012 forecasted revenues of approximately US$900 million.
“Our Asia Pacific revenues have grown nearly five-fold since 2007 and we continue to see tremendous opportunities for growth in all our brands,” said Eric Wiseman, VF Corporation chairman and CEO.
“Our strategies for growth in Asia Pacific – winning big in China, expanding our footprint within other countries in the region, leveraging our scale and focusing on our largest brands – give us confidence in our ability to reach US$2 billion in revenues by 2017 in this growing and dynamic market,” said Aidan O’Meara, president, VF Asia Pacific.
This year, VF expect international sales to comprise about 37 per cent of its total revenues, says Karl Heinz Salzburger, group president, VF International.
“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 per cent of total revenues by 2017,” said Salzburger.
China currently accounts for about half of the region’s total revenues, and is expected to account for 60 per cent of total revenues by 2017, growing at an annual rate of approximately 21 per cent over the five-year period.
Driving leadership across four key categories – outdoor, youth culture, jeanswear and casual bags – VF expects to expand its door count in China from approximately 2300 currently to 6000 by 2017.
In India, VF expects an annual growth rate of 22 per cent, and increase from eight per cent to 10 per cent of total Asia Pacific revenues by 2017. Revenues in Japan, strengthened by the addition of the Timberland brand, are expected to grow at an annual rate of eight per cent over the next five years.
Korea, where VF announced it is opening a new subsidiary office, should be the fastest-growing market, with revenues expected to grow at an annual rate of 52 per cent. The subsidiary will initially support the Vans brand, with the expectation of adding the Timberland brand sometime in the middle of next year.
Timberland, currently VF’s largest brand in the region, is targeting revenue growth of US$230 million in Asia Pacific over the next five years, with an annual growth rate of 13 per cent.
The Lee brand expects to grow its business in the region by US$150 million over the next five years, with a 12 per cent annual growth rate.
The North Face brand expects to grow its Asia Pacific revenues by US$340 million over the next five years, representing an annual growth rate of 26 per cent.
During the next five years, the Vans brand is expected to add US$200 million to its Asia Pacific business, with a 22 per cent annual growth rate.
The Kipling brand expects to add US$80 million in revenues in the region over the next five years, representing an annual growth rate of 18 per cent.
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