Vans Aims for $5B by 2023
Direct-to-consumer is projected to play a key role in helping the brand reach its financial target.
VF Corp.’s Vans brand plans to grow by 10 percent to 12 percent, or $2 billion, over the next five years to reach $5 billion in revenues by fiscal year 2023.
VF acquired the brand in 2004. According to Steve Rendle, the group’s chairman and chief executive officer, Vans has grown at a “17 percent compounded annual rate” and transformed into a $3 billion global lifestyle brand under VF’s ownership. “I am confident in the Vans team’s ability to deliver on a bold $5 billion revenue target which will be a key driver of VF’s plan to deliver superior total return to shareholders over the next five years,” he said.
Doug Palladini, global brand president, said, “By forsaking ubiquity and instead focusing on Vans’ broad pillars of art, music, action sports and street culture, we continue to generate deep and meaningful consumer connectivity that is growing the Vans family worldwide.”
Financial targets include footwear revenue growing at a five-year compound annual growth rate between 10 percent and 12 percent; apparel and accessories between 13 percent and 15 percent, for revenues to more than $1 billion, and direct-to-consumer between 13 percent and 16 percent to more than $3 billion. DTC revenue would represent about 60 percent of global brand revenue. VF said DTC digital revenue is expected to grow to more than $1 billion, or a five-year compound annual growth rate between 30 and 35 percent. VF also forecast revenue in the Americas region to grow to $3 billion, representing a 10 percent to 12 percent compound annual growth rate.
VF said recently it would spin off its jeans division. Vans would remain a part of VF.
During VF’s Investor Day conference Wednesday on Vans, Rendle and the VF and Vans teams spoke from the brand’s offices in Orange County, Calif. Rendle confirmed that the brand’s home base will stay where it is and not move to Denver, the planned headquarters for the company following its spin-off of its jeans division, which will remain in North Carolina.
Kevin Bailey, VF’s group president for the Asia-Pacific region, told analysts in attendance, “Vans is one of our most profitable brands.” He said the brand at the time of VF’s acquisition had just $360 million in revenues and $4 million in operating profits, while gross margin was 48 percent. Today, in the middle of fiscal year 2019, Vans has more than $3 billion in