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VF Corp Is King Of The Mountain

03/09/2012

VF Corp whose outdoor gear brands include The North Face and Smartwool, posted higher-than-expected quarterly earnings late last month as last year’s Timberland acquisition helped drive sales up 37 percent.

VF’s results are in contrast to what much of the apparel industry experienced during the late fall and early winter, as warm weather kept consumers from buying all manner of seasonal products like sweaters, outerwear and accessories.

I like what analyst Taposh Bari stated, “Strength here (at The North Face) suggests that not all ‘winter brands’ are created equal.” Bari’s statement has credibility as global sales of North Face rose 22 percent, and the brand had comparable-sales growth in both the Americas and internationally, VF Corp said.

“The North Face America’s fourth-quarter revenue growth was the strongest we’ve seen all year and included strong double-digit direct-to-consumer growth in both retail and e-commerce channels,” Steve Rendle, president of VF’s outdoors segment in Americas, said on a conference call with investors.

The North Face is driving the VF business right now. Of course you’ll see plenty of TNF outerwear among the granola crowd or in any lift line on the mountain. But today TNF branded apparel can be seen on celebs, like Renee Zellweger above, infants or children. Try going to Starbucks and not seeing the TNF logo on at least one customer. Not possible!

The challenge for The North Face is to keep the momentum going. Other brands such as Columbia Sportswear have experienced this kind of global, pan-demographic penetration only to find themselves out of favor by trend setters.

VF’s acquisition of Timberland was perfectly timed. According to inside sources, VF is attempting to “North Face-ize” other brands in its stable. Right now the focus is on Timberland. It’s possible Timberland has the potential to rise to heights experienced by The North Face. Until then, get used to seeing the TNF logo every where you go.

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