Lifestyle apparels are lucrative business

Lifestyle apparels are lucrative business

One of the leading global branded lifestyle company, American Vanity Fair (VF) Corporation reports an excellent first quarter of the ongoing year

Turnover increased by 31 % to USD 2556 (USD 1959) million and the Timberland acquisition contributed thereof USD 356 million. 12 % of overall the growth was organic (earlier shipments and stronger sales of seasonal products) and international business showed even a 15 % and direct to consumer business 16 % organic growth. Chairman and CEO Eric Wiseman stated:”Our excellent first quarter performance spotlights our success in bringing brand growth across our portfolio and the ability of VF’s diversified business model to deliver healthy, sustainable growth on both the top and bottom lines”.

Gross margin however (anticipated) declined from 47.2 % to 45.7 % and operating income was USD 319 million (including USD 22 million from Timberland and excluded USD 5 million acquisition costs).

The fastest growing division is Outdoor & Action Sports with 60% more revenues and an organic growth rate of 15 %. The acquisitions Timberland® and Smartwool® were contributing USD 356 million as mentioned before. The North face® brand increased turnover by 14 % with double digit growth both in the Americas and internationally and the brand’s direct-to-consumer business added 20 % in the first quarter the same is true for The Vans® brand’s direct consumer business which added 18 % to revenues and the brand added 25 % more revenue globally. Timberland grew modestly with continued growth in Timerland® Earthkeepers® collection and PRO® lines. The division’s operating income rose 40 % to USD 202 million, including earnings from Timerland of USD 17 million, however the operating margin fell from 18.3 % to 16.0, without Timberland the operating income however increased 28 %.

Jeans wear grew by 9 % with double digit increases across the Lee®. Mass Market and Western business in America was strong and reflected also the recent launch of Rock and Republic® jeans wear. The international sales of jeans declined slightly but growth in Asia was offset with lower European and other regions sales.

Image wear grew 12 % with gains from both Image and Licensed Sports group (+ 3 %) and revenue growth of 21 % and strong demand of uniforms in the oil and gas as well the automotive industries. Operating income increased 16 % and the operating margin rose from 15.0 to 15.5 %.

Sportswear had 10 % more sales reflecting increases in both Nautica® (+6 %, foremost deriving from men’s sportswear and retail business) and Kipling®(U.S.) brand. Sportswear’s operating income increased by 44 % and operating margin from 6.6 % to 8.7 %.

Contemporary Brands reported a gain of 13 % in revenues from For All Mankind® (product innovation, new styles in both denim and sportswear added 18 % in American revenues and double digit growth both in wholesale and direct to consumer business), Splendid®, Ella Moss® and John Varvatos® (this brand is sold to its founder) brands.

The international turnover increased 48 % (total share of VF’s revenues is 40 %) and 33 % thereof come from Timberland and direct to consumer revenues grew by 49% (total share is 19 %) and 32 % from Timberland. A total of 24 stores were opened in the first quarter bringing the number of owned retail stores to 1059.

The portfolio of branded lifestyle apparel entails more than 30 brands and the six top brands are The North Face®, Wrangler®, Timberland®, Vans®, Lee® and Nautica® and other brands are 7 For all Mankind®, Eagle Creek®, Eastpak®, Ella Moss®, JanSport®, John Varvatos®, Kipling®, lucy®, Majestic®, Napapijri®, Red Kap®, Reef®, Riders®, Splendid® and Smartwoll®.

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