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Wednesday, August 7, 2019
Volume 2, Issue No. 14

VFC Puts Additional $20 Million Behind FutureLight

FutureLight, the breathable, waterproof nanospun technology being launched this fall in The North Face’s Summit Series and Steep Series of technical garments, will be bolstered by a $20 million infusion of demand creation dollars from the TNF parent.

“There will be quite an expanded media of investment not only from a print and online social component, but also from enhanced in-store tools that really help people understand it, because this is a different technology,” VFC CFO Scott Roe told analysts last week.

The North Face intends to expand FutureLight into its broader rainwear assortment as second- and third-generation iterations of the technology hit the market. This spring, the technology will launch in footwear as well in an expanded selection of apparel items. VF President and CEO Steven Rendle thinks the concept will reach beyond outdoor technical to the lifestyle and urban exploration segments of the broader apparel market.

Meanwhile, Rendle says many outdoor retailers are doing well and have learned from mistakes in seasons past. “We see a healthy marketplace, one that’s thoughtful and sitting in a much healthier place from an inventory standpoint.”

VFC’s North Face brand revenues grew 9 percent (12 percent in constant dollars) in Q1 and its Vans’ business increased 20 percent (23 percent in C$) as total U.S. sales rose in double-digits for the period ended June 30. Annual revenues are now projected to rise 8 percent on an organic basis to $11.8 billion. Active, which generated more than $1.23 billion in Q1 sales, is projected to grow its annual topline 10 to 11 percent due to continued strength at Vans, where yearly revenues are forecast to rise 11-13 percent. Outdoor, bolstered by contribution from TNF, is pegged at 6 percent annual sales growth and Work sales will increase 4-6 percent this fiscal year.

As for Timberland, forecast to increase its annual topline in the low single digits, results are slowly getting stronger due to efforts focused on realigning the brand’s go-to-market disciplines, segmentation of products and good sell-throughs on non-Classic styles. Meanwhile, quarterly revenues for Dickies rose 2 percent and were impacted by a strategic brand repositioning in Japan and the timing of shipments.