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VF Corporation announces 2021 strategic growth plan

06
Apr '17

Courtesy: VF Corporation

VF Corporation, one of the world’s largest apparel, footwear and accessories companies, has announced its 2021 strategic growth plan and key initiatives designed to deliver superior returns to shareholders. The 2021 growth plan addresses the quickly changing market landscape with a measurable goal of delivering top quartile total shareholder returns.

The five-year plan focuses on four strategic choices that serve as the foundational elements of the new strategy. These choices are: reshaping the company’s brand portfolio and enabling VF’s powerful brands; transforming to a consumer and retail-centric model; elevating direct-to-consumer while prioritising digital; and, distorting investment toward Asia, with a heightened focus on China.

The four choices will be enabled by amplified investments and focus on six critical capabilities, namely, design and innovation, demand creation and brand experience, insights and analytics, retail excellence, demand and supply chain agility, and talent, the company said.

“Our 2021 strategic growth plan fuels our aspiration to consistently grow by creating amazing products and brand experiences that transform and improve the lives of consumers worldwide,” said Steve Rendle, president and chief executive officer. “VF has some of the most beloved and iconic brands in the world and a talented organisation that has the passion and commitment to thrive in a rapidly changing marketplace.”

Rendle continued, “The strength and consistency of our largest brands and business platforms give me great confidence in our ability to achieve our targets. We remain sharply focused on our diversified value creation model, which is designed to deliver solid results across the many and varied business cycles and economies around the world.”

In terms of financial targets for 2021, VF expects revenue to grow at a five-year compound annual growth rate (CAGR) between 4 per cent and 6 per cent, fueled by VF’s largest brands—the Vans, The North Face and Timberland—and the company’s International and Direct-to-Consumer business platforms. Gross margin is expected to reach 51.5 per cent in 2021, while operating margin is expected to reach 16 per cent in 2021. VF expects to deliver annual total shareholder return (TSR) in the 13 per cent to 15 per cent range as the company continues to target top quartile TSR performance.

Meanwhile, the company's Board of Directors has authorised a change in VF’s fiscal year end from the Saturday closest to December 31 of each year to the Saturday closest to March 31 of each year, effective for the fiscal year beginning April 1, 2018. The first 12-month fiscal year after the change will run from April 1, 2018 through March 30, 2019. (RKS)

Fibre2Fashion News Desk – India

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