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President VF Asia Pacific VF Corporation
Countries such as Korea and Taiwan have become very influential and complementary to the more traditional Western and Japanese sources of influence.
Aidan O’Meara, President VF Asia Pacific tells about growth in the region as he converses with Fibre2Fashion Correspondent Manushi Gandhi.
VF Corporation is a $11 billion apparel and footwear powerhouse, with an incredibly diverse, international portfolio of brands and products. The company was established first as Reading Glove and Mitten Manufacturing Company in Pennsylvania in October 1899 by John Barbey and a group of investors. Today it owns various brands like Wrangler, Lee Jeans, Rustlers, 7 For All Mankind, 20X, Chic, Rock & Republic, Nautica and some more.
Aidan O'Meara was named President-VF Asia Pacific in March 2007 and had previously served as President of VF's Jeanswear - International coalition since May 2005. Aidan joined VF in 1992 where he had responsibility for the Wrangler business in Ireland. His background, prior to joining VF, was in brand marketing and sales management for a number of FMCG companies in the US and Ireland. Aidan has an honours degree in bachelor of business studies (BBS hons) from Trinity College Dublin and is also a graduate of the Marketing Institute.
Revenues of VFC increased 15% in 2012 while the same is by 5 % in 2013. What factors are responsible for this?
VF acquired the Timberland brand in 2011, making 2012 the first full year during which Timberland’s revenues were included in our financial reporting. For 2012, the 15 percent increase in revenues was largely driven by the positive Timberland impact, which accounted for 9 percentage points, or $907 million, of the revenue growth reported in 2012. Therefore, by comparing VF’s revenues from 2012 to 2013, even excluding Timberland, it’s evident that our growth rate was healthy and steady.
What is the contribution of the Asia-Pac region in the total sales of VFC?
The Asia-Pacific region continues to be a source of strong revenue growth for VF. As we recently reported in our first-quarter 2014 earnings release, VF’s revenues in Asia-Pacific were up 16 percent. This growth was driven by 27 percent increase in revenues in China. Nearly every VF brand contributed to this growth; however, it is important to note that our Vans brand grew revenues more than 40 percent in the Asia-Pacific region in the quarter.
The Asia-Pacific region is a very important geography for VF’s international growth strategy and we will leverage our strengths to consistently perform and achieve our goal of doubling regional revenues to $2 billion by 2017.
What can be expected by clothing makers and sellers from the Asian markets in the next 5 years?
Asia presents a favorable environment for the apparel industry in the coming years, but it will not likely be as strong as we have seen during the past five years. There will be further consolidation at retail and with brands as the market gets more competitive and the rate of retail distribution growth slows. The emphasis is shifting toward higher productivity and share growth. VF is well positioned to succeed in this environment given our powerful brands and our financial strength.
You are associated with VFC since 1992. During last 21 years, which market/economic situation has been the most challenging?
The most challenging period occurred in the early years of the millennium when the European denim market suddenly slowed as consumer trends shifted temporarily away from denim to flat fabrics such as cargo pants. With the benefit of hindsight, it was clear that denim brands, including ours, had become complacent following more than a decade of strong growth driven by basic jeans and strong marketing. Consumers became bored with the lack of product innovation in jeans and looked elsewhere for excitement. At VF, this forced us to rethink our business model, increase our focus on innovation and redefine our distribution strategy as many of the traditional multi-brand retailers closed. The denim business was ultimately revived as brands brought fabric, wash and features innovation to consumers, but the market had fundamentally altered in the interim. Personally, I learned a valuable lesson about the need to continuously ask ourselves whether we are doing enough to excite our consumers, and I learned to never be complacent. Innovation is critical to enduring success; it is also the best way to put yourself in a position to overcome macro-economic challenges.
While talking about the growth in Asian countries what points should be kept in mind? What are the risk factors in Asian markets?
There is greater volatility in Asia than elsewhere in the world. It is a very dynamic region that is susceptible to sudden changes that can impact businesses. Some of this volatility stems from policies that can have significant effects relatively quickly. One example is India’s rapid devaluation of the rupee and the sudden introduction of an excise tax on branded apparel which, thankfully, was withdrawn. I think companies such as VF best minimize the impact of this volatility by having long-term commitments to the market, and by localizing key elements of the business model, such as sourcing for example, within the domestic market.
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