VF Corporation
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5 Powerful
Brands
That Never
Stand Still
2012 Annual Review
& Performance Update
+A Snapshot Of Other VF Brands
On The Move
6
The North Face®
athlete-
driven
The close partnership between
The North Face® brand and
its athletes drives its success.
12
Vans®
Change
inC.
The Vans® brand is the original
action sports and youth culture icon.
But you can’t stay original by doing
what you’ve always done.
18
Timberland®
SeCond
nature
Creating innovative, environmentally
responsible products consumers love is
second nature to the Timberland® brand.
24
Jeanswear
re-Made
to laSt
A focus on consumer-centric innovation
drives the Wrangler® and Lee® brands to
constantly invent new products and reinvent
older ones.
Made
to
laSt:
2012 Annual Review
& Performance Update
Contents:
4
to our shareholders
Eric Wiseman
Chairman, President & Chief
Executive Officer
+
2012
SnapShotS
A look around the world of VF.
28
VF Performance Update
Bob Shearer
Senior Vice President & Chief
Financial Officer
VF Brands At-A-Glance
operating Committee
Board of Directors
the Last Word
34
35
36
38
revenueS greW
15% reaChing
a reCord
$10.9 B
international
revenueS reaChed
37% oF total
revenueS
CaSh FloW FroM
operationS WaS
a reCord
$1.3 B
direCt-to-ConSuMer
aCCounted For
21% oF total
vF revenueS
eric C. Wiseman
Chairman, President & Chief Executive Officer
to our Shareholders:
2012 was another year of records for VF— record revenues, record
margins, record earnings and record cash flow from operations.
It was a year that revealed the strength of our company and
business model.
VF has unique strengths that provide us with an enduring competitive
advantage, including:
• A diverse portfolio of more than 30 brands that combine a rich, authentic
heritage with new product innovation to reach a broad array of consumers
in every market;
• A consumer-centric approach to product development, backed
by comprehensive research, that is helping us forge ever-deeper
connections with those who buy and wear our products;
• A highly efficient, flexible and diversified supply chain that includes both
owned and sourced manufacturing, which gives us unparalleled
advantages in product innovation, speed-to-market, cost and quality; and,
• An extraordinary bench of talent across our brands and functional areas
that is committed to winning in any environment — and to delivering strong,
consistent returns to our shareholders.
Individually, any one of these strengths would be an enviable asset for
a company to have. Yet together — in concert — they are at the center of
VF’s DNA and are what allows us to consistently generate value for our
shareholders. Our focus on TSR, or total shareholder return, has clearly
paid off, with VF generating a TSR averaging 30 percent during the last
three years. And we are far from done.
2012: a Year of Milestones
In 2012, total revenues grew 15 percent, reaching a record $10.9 billion, with
organic growth in every coalition, every global region, and in both our
wholesale and direct-to-consumer businesses. Excluding The Timberland
Company (“Timberland”), VF’s organic revenues grew by 6 percent.
Internationally, constant dollar revenues for the year were up 29 percent, or
11 percent excluding Timberland, with double-digit growth in our Asia,
Europe and non-U.S. Americas regions. In 2012, international revenues
reached 37 percent of VF’s total revenues.
Direct-to-consumer revenues, which include our owned retail and
e-commerce businesses, increased 25 percent — an increase that takes our
DTC business to 21 percent of total VF revenues. Excluding Timberland,
direct-to-consumer revenues increased 10 percent in 2012.
Adjusted earnings per share — which exclude Timberland acquisition
expenses and the gain on the April 2012 sale of the John Varvatos
Enterprises Inc. business — increased 17 percent to $9.63, well above our
long-term target of 12 percent annual EPS growth. VF’s reported earnings
per share for 2012 reached a record $9.70.
VF’s cash flow from operations was a record $1.3 billion in 2012. Among
other things, this strong cash flow helped fund a 21 percent increase in our
quarterly dividend rate, marking the 40th consecutive year of increasing
dividend payments to shareholders.
vF’s growth drivers guiding
our Success
Turning to 2013, we’re looking forward to delivering another year of record
revenues and earnings. All global companies operate in a constantly
changing environment and we have proven — time and time again — our
ability to effectively manage our business under a variety of conditions.
This year will be no different. We will continue to leverage our business
model and competitive advantages to grow revenues, expand margins and
increase earnings while mitigating external economic risks.
Since being introduced in 2004, VF’s six growth drivers have guided our
success. And they will continue to do so in 2013.
Our first growth driver is “Build Lifestyle Brands.” In 2013, this means
maintaining the momentum in our fastest-growing business, Outdoor
& Action Sports, and continuing to empower our other brands to grow
and reach their full potential, globally. We’ll leverage our consumer
insights, marketing and product-development capabilities to strengthen
consumer loyalty for all of our brands. Ensuring Timberland continues to
create value for our shareholders — by growing revenues and improving
profitability — remains a key focus. This fall will mark the launch of
Timberland men’s apparel in the U.S., which will complement the brand’s
existing apparel businesses in Europe and Asia. Although the launch will
be intentionally small and modestly incremental to revenues, we have
great confidence that it will set the stage for our ultimate goal of adding
$300 million to Timberland revenues in the coming years.
“Go Global” is our second growth driver. Our focus is on investing behind
our strong momentum in Asia and navigating through difficult conditions in
Europe. Our business in Europe continues to post solid growth, as our
marketing investments fuel expansion in our biggest and most profitable
brands and markets. The power and authenticity of our brands, combined
with generally low market penetration in many countries, gives us confidence
in our ability to continue to grow in Europe in the near and longer term.
In Asia, the story for VF is just beginning. To date, we have built four platforms
for growth in this region: Jeanswear, primarily with the Lee® brand;
Outdoor with The North Face® and Timberland® brands; Action Sports with
the Vans® brand; and, handbags and accessories with the Kipling® brand.
In 2012, we announced our intent to add $1.1 billion in revenues in Asia
during the next five years. We have tremendous opportunities in the region,
and capturing these opportunities will be a significant factor in achieving
our goal of 45 percent of revenues from international markets by 2017.
VF’s third growth driver is to “Serve Consumers Directly,” through our
growing base of retail stores and e-commerce. This year, we plan to open
approximately 160 stores across our brands. VF’s e-commerce business
grew more than 30 percent in 2012, and we expect similarly strong perfor-
mance in 2013. In total, our direct-to-consumer business should comprise
about 23 percent of total revenues this year.
Our fourth growth driver is to “Win with Winning Retailers.” About
75 percent of our business comes from our wholesale partners, so at the
center of this strategy is aligning our brand, product and marketing
strategies with those partners who can drive mutually beneficial, profitable
growth. A great example of this growth driver in action was our 2012
launch of the Rock & Republic® brand exclusively at Kohl’s, with results
that surpassed our expectations.
Fifth is to “Enable VF’s Future.” VF is a much bigger company today than
we were just five years ago. To continue our momentum, we recognize
the importance of consistent investments behind a best-in-class infrastructure,
including talent development, supply chain capabilities and technology.
In 2012, our capital expenditures reached a record $244 million, as we
invested in growth-supporting projects, such as new distribution centers,
coalition offices, technology and retail stores.
Our sixth growth driver is to “Lead in Innovation.” At VF, we have a simple
definition of innovation: something new that creates value. Products, of
course, are at the heart of our innovation agenda. From The North Face®
brand’s FlashDry™ technology fabric that provides unmatched moisture
wicking…to the Timberland® brand’s anti-fatigue boot technology that
gives workers all-day comfort…to patent-pending technology in Jeanswear
that provides a superior fit for women, all of our brands are actively
pursuing breakthroughs in product and process innovation.
We are proud of our company’s success — but we are also keenly aware of
the many challenges posed by mixed economic conditions globally. We
continue to scrutinize costs across the board and keep inventories tightly
controlled. At the same time, challenging conditions offer great opportunities
for strong companies with strong brands to invest and gain market share.
So we will continue to invest in our highest-growth, most-profitable brands
and businesses to support our top and bottom line momentum.
Our portfolio of brands is as strong as it has ever been. We have countless
opportunities to grow around the world. We are investing to strengthen our
core capabilities in product development, technology, direct-to-consumer
and sustainability, among others, to support an even bigger and more
profitable VF in the future.
eric C. Wiseman
Chairman, President & Chief Executive Officer
4
Note: All per share amounts are on a diluted basis.
5
athlete-
driven
the close partnership
between The North Face®
brand and its athletes
drives its success.
Conrad Anker is one of the world’s most accomplished alpine climbers.
Not only has he summited Mount Everest three times, but on one of his climbs
he also found the body of legendary British climber George Mallory, who
disappeared while trying to reach the peak in the 1920s. Dean Karnazes
was named one of TIME magazine’s “100 Most Influential People.” This world
champion ultrarunner is known as “The Marathon Man” for running 50
marathons in 50 U.S. states in 50 consecutive days. Kit Deslauriers, World Cup
extreme ski champion, was the first person to ski from the apex of every
continent, known as the Seven Summits. USA Today called her ski descent
of Mount Everest the “ultimate test of knowledge and will.”
To understand what makes The North Face® brand successful, you have
to understand its relationship with Conrad, Dean, Kit and more than 70 other
athletes on the brand’s global team.
6
7
Hal Koerner, Ultrarunner
Chamonix, France
The North Face® iPhone® app
Xavier de Le Rue
World Champion Snowboarder
and X Games Gold Medalist
Conrad Anker
Mount Everest at night
Athlete-Driven storytelling to engage
with Consumers
In addition to product development and research, expeditions also
provide The North Face® brand with a continuous source of new stories
to engage and inspire consumers around the world. Many of
The North Face® athletes — such as Jimmy Chin and Renan Ozturk — are
also accomplished filmmakers and artists. Numerous videos the brand
distributes online, in social media or in-store via the The North Face®
digital ecosystem — and most every TV commercial run during the
holiday season — were filmed by an athlete. That’s a level of authenticity
that no other brand can match.
Even more powerful is the expedition storytelling facilitated by technology
and social media. This year, consumers around the world got real-time
photography, audio and video from athletes in the highest mountain
ranges of Nepal, on New Zealand’s cross-country Te Araroa trail
and during a snowboarding expedition in Antarctica. During “Mission
Antarctic,” Xavier de Le Rue and Lucas Debari were able to share
real-time dispatches as they rode some of the steepest and most beautiful
lines at the bottom of the world.
The North Face® brand is constantly working to create new ways — both
traditional and digital — for consumers to experience the brand. In 2012,
more than 11,000 consumers attended The North Face® Speakers Series,
a 39-stop global speaking tour featuring the brand’s athletes. Another
10,000 in Europe and the United States watched webcasts online.
And last year also saw the launch of a new iPhone/Android app that
enhances the shopping experience by seamlessly blending brand stories
with product information and options for purchase and delivery. No matter
where they shop, consumers have access to the full breadth and depth of
the brand at their fingertips.
Athlete-Driven education to expand into new Markets
China represents a unique growth opportunity, but to leaders at
The North Face® brand, it’s one that looks familiar. “The outdoor category
in China today is similar to the United States in the late ‘60s and Korea
in the late ‘90s,” says Jacob Uhland, General Manager, Asia Pacific.
“We need to educate the beginners in China first.”
“the most important
thing we build into our new
products is the real-life
experience of our athletes.”
— Kevin Joyce, Director, Product
“no other company has this
level of interaction between
athletes and designers.
We’ll have an idea and the
design team creates a
prototype. then we take it
out on expeditions and
give them real-time feedback
to fine-tune it.”
— Conrad Anker, Alpinist
What’s unique about the brand’s relationships with these extraordinary
athletes is that they are empowered to become product developers,
storytellers, scientific researchers and educators inspiring to millions of
consumers who want to explore the world while testing the limits of their
own potential.
“We know that consumers want to engage with authentic brands that
are grounded in heritage and the real world, rather than brands
that simply manufacture products,” says Joe Vernachio, Vice President,
Global Product, The North Face® brand. “With our athlete-tested,
expedition-proven model, we’ve been the first to introduce key
innovations that changed our industry. Consumers respect this and
reward us for staying true to who we are.”
Athlete-Driven Innovation to Create
Breakthrough Products
The best way to create products that push the limits of design and
technology is to work with athletes who push the limits of human endurance.
In 1972, The North Face® brand sent famed skier and adventurer Ned
Gillette on a 300-mile ski traverse in Alaska’s Brooke Range to test its
latest protective apparel. Forty years later, The North Face® brand athletes
are still traveling the world to experience real-world challenges for the
brand’s Research, Design and Development (RDD) team to solve.
Every year, there aren’t just new mountains to climb or records to break.
There are new products to test, new problems to solve and new value to
be created for consumers. When consumers buy The North Face®
apparel, they know that world-class athletes don’t just wear it, they
helped create it.
In May 2012, six of The North Face® brand athletes successfully summited
Mount Everest. The expedition, which was co-sponsored by National
Geographic, also included physicians from Mayo Clinic and product
engineers from The North Face® brand. Their firsthand research on the
effects of this harsh environment on the body and mind is being applied
to future products.
Everest was also the final proving ground for The North Face® brand’s
latest innovation called Thermoball™ fabric, a revolutionary new
insulation material that is as warm as a 600-fill goose down jacket made
of the same fabric and quilt construction, but can get wet and still
maintain its CLO (apparel temperature) rating. Thermoball™ fabric was
originally tested in 2011 on the face of Mount Meru in the Garhwal
Himalaya region of India. After getting the final “thumbs up” from the
athletes on Everest, it will reach store shelves in 2013.
8
9
3 next-
generation
produCtS.
availaBle noW.
Flashdry™ Fabric technology:
industry-leading technology
For Moisture Management
and temperature regulation
FlashDry™ fabric technology uses a microporous particle
additive that accelerates moisture removal away from the skin
and speeds the drying time of the fabric. It lets users stay drier
and warmer, so they can stay outside longer in a wider range
of weather conditions. Yet — FlashDry™ fabric technology
doesn’t add weight or bulk, and it never washes or wears out.
FlashDry™ fabric technology is incorporated into more than
100 of The North Face® products — base layers, fleeces, shells
and accessories for running, snow sports, climbing and
hiking. This fabric technology launched worldwide in 2012.
thermoball™ Fabric:
the next evolution
of insulation
Thermoball™ fabric is a new synthetic material that
combines the low weight, warmth and compression of
down with the wet-weather insulating performance
of synthetics.
Unlike traditional synthetic insulation, Thermoball™
fabric structure mimics down clusters, trapping heat
within small air pockets to retain warmth. Thermoball™
fabric provides warmth equivalent to a 600-fill goose
jacket made of the same fabric and quilt construction,
but with less weight and bulk.
Respect for nature is deeply rooted in Chinese culture. But during the
last few decades, the country’s major population shift from country to
city has distanced its citizens from the unspoiled environments they love.
“Consumers lack the knowledge,” says Lu Guo, Director, Strategy,
Asia Pacific. “They have no idea about where to go, who to go with, what
to wear or how to protect themselves. This offers a great opportunity for
The North Face® brand.”
To chart the way forward in China, the brand is looking to its past. Since
its inception, The North Face® brand has built a community of outdoor
participation through education, with veteran athletes teaching beginners.
Today, The North Face® brand is building a new community of outdoor
enthusiasts and connecting them via a powerful online platform.
In 2008, The North Face® brand assembled its first China Athlete Team,
a group of 12 elite rock climbers, mountaineers, skiers and trail runners.
With the brand’s support, in 2012 the team’s leader, renowned Chinese
mountaineer Sun Bin, started the Summit Outdoor School to educate
leaders of local outdoor clubs around the country. The school trained 300
guides in 2012, and has aggressive plans to educate 3,000 guides each
year by 2017.
To connect beginner athletes with local clubs, The North Face® brand is
utilizing Quyeba.com, an online platform that blends social networking,
gaming, instruction, inspiration and e-commerce. Users can go on
“real-world” outdoor quests to achieve badges that build their online
identity. They can also share photos and stories and meet other
outdoor enthusiasts to plan excursions. Within two weeks of its launch,
The North Face® brand had 10,000 registered users on Quyeba.com,
and 400 of China’s professional outdoor clubs started interacting and
promoting trips on the platform.
For more than 40 years, The North Face® brand athletes have helped
lead the brand into new markets and new successes.
“Pushing our boundaries, both mental and physical, in extreme
environments is what we do,” says Conrad Anker, The North Face®
brand global athlete team captain. “To go where no one has gone
before — be it an unclimbed peak, a fresh ski trick or a level of
endurance — are the possibilities that drive us. This same dedication to
breaking new ground is embodied in our product line. Designing the
lightest, strongest and most durable product is an ongoing journey.”
aBS vest: the industry’s
First avalanche
airbag apparel System
ABS uses a nitrogen gas canister to inflate two high-
volume airbags that keep the wearer on the surface
of an avalanche, visible to rescuers.
The ABS system has received numerous awards
and high praise in press coverage on the TODAY Show,
Popular Mechanics, Men’s Journal and Outside
magazine, registering more than 32 million impressions.
Most importantly, the ABS system has proven to
significantly improve safety in the backcountry, with a
95 percent success rate in real-world use.
10
Change
inC.
the Vans® brand is
the original action sports
and youth culture icon.
But you can’t stay
original by doing what
you’ve always done.
a lmost 50 years ago, on the sun-soaked streets, sidewalks, stairs
and empty swimming pools of Southern California, a brand and a movement
were born at the same time. The Vans® brand and skateboarding grew up
together. The brand’s iconic, waffle-sole designed shoes, worn by the riders
who created the sport, changed youth culture forever — impacting everything
from film and music to art and fashion.
Skateboarding, and other action sports such as surfing, snowboarding and
BMX, aren’t like traditional sports. Although competition is one aspect of
these sub-cultures, referees, rules and coaches are disliked by participants.
Individuality reigns supreme. Drawing your own line and expressing yourself
on your terms push these sports and their cultures forward.
These twin impulses of creative self-expression and individuality are universal.
And they appeal to more than just athletes. They’re for anyone who wants
the freedom to be themselves — in their art, their music or their style. Among
the young, who are most eager to make their unique mark on this world, these
desires are amplified.
13
“Consumers first put Vans® shoes on their feet to express themselves
differently,” says Kevin Bailey, President, Vans® brand. “They drew on
their Vans® shoes with a pen and created our first checkerboard patterns
years ago. The most successful brands are authentic, and that’s where
this brand comes from. People see the authenticity and they want to be
part of it.”
The Vans® brand does not embody just skateboarding. It represents the
larger youth culture that inspired it. This is the true driver of the brand’s
extraordinary global growth, with the Vans® brand quadrupling in size
since being acquired by VF in 2004. Because the Vans® brand has been
grounded in youth culture from its inception (the brand’s tagline is “Off
the Wall® since 1966”), it has earned a rare and long-lived credibility.
And the Vans® brand continues to be on the move. In 2012, VF
announced plans to add $1 billion in revenues to the brand by 2016,
representing a 13 percent compound annual growth rate. The
under-the-radar worlds of action sports and youth culture are becoming
more mainstream and reaching larger audiences. Consumers are
looking for meaning and purpose in the brands they choose. The Vans®
brand — with its great depth and authenticity — is poised to make the most
of this opportunity with deep consumer connections, product innovation,
a strong direct-to-consumer model and geographic expansion.
Changing the Way Consumers Connect and Interact
Young people find new and different ways to express themselves every
day. New technologies allow them to be instant photographers, film-
makers and musicians. New communications platforms have given them
a personal stage, soapbox, gallery or TV channel. To reach young
consumers, you cannot just run commercials — you have to be relevant
to the way they communicate and live their lives.
“Kids see their parents
and grandparents wearing
the Vans® brand and
they’re cool with it. our
authenticity allows us to
cross the generational
boundaries that constrain
most brands.”
— David Solomon, Vice President, Footwear
Vans® LXVI Collection
Collaborations
Quadrupling in size since
its acquisition by vF
$1.4 B
$345 M
2004
2012
14
Vans® Triple Crown of Surfing®
Vans® Warped Tour
“During the past five years, we have transformed our marketing
approach — from focusing on traditional advertising to innovating with
interactive experiences,” says Doug Palladini, Vice President, Global
Marketing, Vans® brand. “You cannot be a successful youth culture
brand today unless you’re innovating with interactive platforms.”
The Vans® brand has always had a close relationship with its
consumers, through retail stores, local events and athlete teams. Today,
non-traditional marketing, interactive experiences and global events —
amplified by a far-reaching social media presence — make the brand
omnipresent in their lives.
“From Beijing to Buenos Aires to Brooklyn, there‘s not a weekend that
goes by without a Vans® event taking place,” Palladini says. “In person,
and live on the web, Vans® events and promotions bring our brand
stories to life.”
Vans® web traffic ranks among the top five of all sports brands
worldwide. In 2011, 10.4 million people watched the Vans® Triple Crown
of Surfing® via online stream, making it the most-watched action sports
event in history, in any medium. Offthewall.tv, the brand’s online
television network, grew by 66 percent to 2.5 million streams with more
than 300 episodes of 15 original series. Available 24/7/365, Offthewall.tv
is a vital source of outreach to new consumers around the world. 2012
also saw the 18th year of the Vans® Warped Tour, the longest-running
music tour in U.S. history, with an annual attendance of more than
650,000 fans. Footage from the tour was the basis for the full-length
music documentary, “No Room for Rockstars,” which premiered at the
2012 Slamdance Film Festival. In Europe, the Downtown Showdown®
skateboarding contest in Amsterdam received 71 million impressions.
All of this content is distributed to a fast-growing base of consumers
through the brand’s social media platforms. And in 2012, the number of
Vans® global Facebook fans reached nearly 10 million. Vans® Girls
Facebook followers tripled to 989,000.
Creating the Future of Action sports Footwear
The Vans® brand was founded on product innovation. Years ago, the
brand’s sticky waffle-sole design and superior board feel modernized
skateboarding by meeting the unmet needs of riders. Twenty years ago,
the Vans® brand produced the first signature model skateboarding shoe,
the Steve Caballero Full and Half Cab, and has led the way in athlete-
inspired action sports shoes and boots ever since. Today, athletes — from
surf, skate, snow, BMX and motocross — are all part of the development
process. Tied into music, art and street culture, the Vans® brand also
soaks in influence from an extended global family of musicians, artists
and designers across all genres.
“Innovation is about constantly evolving with our youthful consumer,”
Palladini says. “We must anticipate their needs and provide them with
ways to help them express their creativity.”
2012 marked the launch of a new product that perfectly represents that
evolution, the LXVI (or “66,” named for the year in which the Vans® brand
was founded) footwear collection.
“Action sports have grown up in some ways,” says Bailey. “Youth
consumers don’t think about action sports as an alternative activity. They
take piano lessons, they play soccer and they snowboard. It’s part of their
everyday lives. This means we have a great opportunity with more
mainstream consumers.”
Having grown up wearing traditional athletic shoes, these consumers are
looking for similar features in shoes for action sports. The LXVI collection
blends them for the first time. The shoes are lightweight, comfortable
and feel more like a traditional athletic shoe, thanks to a slight lift in the
heel. The Vans® brand also reinvented its trademark waffle-sole pattern,
providing flexibility and a more dynamic fit. The LXVI collection was
launched in 2012 in select Foot Locker, lifestyle specialty and sporting
goods stores, as well as online and in Vans® retail stores.
15
Classics: iconic For
47 years
The pioneers of skateboarding embraced the Vans®
Classics because the flexible, gum-rubber outsole let
them feel their boards while providing tremendous
grip. The now-famous waffle-sole design has been on
the feet of generations since.
Reaching new Consumers Around the World
“Arguably, the Vans® brand has one of the most successful models in
brand retailing, while maintaining a strong and growing wholesale
business,” Bailey explains. “In fact, direct-to-consumer has been a part
of the Vans® brand since the beginning.” The model — which blends
owned stores, partner doors and e-commerce — is a powerful competitive
advantage. Specialty boutiques, such as the the Vans® DQM General in
New York and Off the Hook in Montreal, offer the brand opportunities to
get closer to its consumers, while maintaining vital relationships with
local retail partners. In addition, the brand launched e-commerce sites
in seven European markets in 2012. By sharing resources with VF sister
brands on the company’s platform in Switzerland, the Vans® brand has
been able to expand online quickly.
Owned stores, however, present the best opportunity for the brand to
tell its story, particularly in critical emerging growth markets such as
China. In 2012, the Vans® brand launched a new global store format
designed to use the brand’s heritage to tell locally relevant stories. The
first refit was the Vans® brand flagship store in Beijing, where the brand
saw a jump in same-store sales of 20 percent. “Retail is not just the
vending machine,” says Mitchell Whitaker, General Manager, Action
Sports, Asia. “It’s much deeper than that. Consumers need to see, touch
and feel to really get a sense of what the brand is about when they go
to a retail location.” The Vans® brand ended 2012 with 354 owned retail
stores worldwide.
Wherever it goes around the world, the Vans® brand stands for creative
self-expression and originality. These values know no border or
boundary, although they are carefully interpreted in different ways in
different markets.
For example, after extensive consumer research in China, the Vans®
brand has focused its brand on skate and music, two activities that
resonate with Chinese youth consumers. The Vans® brand sponsored
events in 28 Chinese cities for “World Go Skateboarding Day,” drawing
more than 3,000 participants. In 2012, the Vans® brand was also the first
brand to collaborate with the three-day Midi Music Festival, a socially
conscious music festival that raises awareness about the dangers of
pollution in China. These efforts, along with a growing retail footprint,
are driving double-digit growth in this dynamic market. In 2012, the
Vans® brand reached an important milestone in China: 500 partner
doors, a number they hope to triple during the next four years.
The Vans® brand is also showing phenomenal growth in Europe while
continuing to expand in North America. Although the brand has been in
Southern California for 46 years, its presence on the East Coast and
other key regions remains small. And room for a global brand to expand
close to home is a rare opportunity.
Like skateboarders, the Vans® brand is ready to show everyone what it
can achieve, while staying true to itself.
Vault™ Shoe:
the Shoe that Began
a transformation
The launch of the Vault™ shoe was a turning point for
the Vans® brand. For the first time, the brand specifically
targeted style-driven consumers who grew up with the
brand, but had outgrown the look of canvas sneakers.
The brand went back to the vault, literally, to reinvigorate
forgotten classic silhouettes with new, more sophisticated
materials, such as Italian leather.
3 generationS
oF VANS ®
pro Classics: the Best,
only Better
As skateboarding evolves, kids are continually pushing
the limits with bigger jumps and more technical
tricks — while pushing their shoes to the breaking
point. Pro Classics give everyday skateboarders the
classic Vans® brand look with more durability and
support to withstand the abuse of asphalt and cement.
16
17
17
SeCond
nature
Creating innovative,
environmentally responsible
products consumers
love is second nature to the
Timberland® brand.
the Timberland® brand’s 40-year journey to becoming a leader in
sustainable footwear began with a small step—its founder’s refusal to
compromise. At a time when conventional wisdom said it was impossible to
make a waterproof leather boot, Nathan Swartz went on a years-long quest
to prove them wrong. The result? The Timberland® brand’s first waterproof
leather boot, the iconic yellow “10061.”
This ethos of New England craftsmanship and Yankee ingenuity — the refusal
to make concessions in the desire to create something better — has propelled
the brand’s growth. It has also inspired an impassioned and relentless search
for new, more environmentally and socially responsible materials and
manufacturing processes.
“The central idea of the Timberland® brand is to ‘make it better’— both in
our products and in our communities,” says Robin Giampa, Director,
Communications, Timberland® brand. “We were founded on that ideal,
and it still holds true today.”
In 1973, making a sustainable product meant building it to last. Today, the
Timberland® brand’s promise to consumers is even more powerful —
great-looking, well-crafted and innovative products that are made to perform
without compromising either principles or profits.
18
“Our initiatives have proven that sustainability can be a competitive
advantage,” says Patrik Frisk, President, Timberland® brand. “We have
improved our bottom line by reducing energy costs and greenhouse gas
emissions, and we’re creating top line growth by meeting consumers’
growing desire for eco-conscious products.”
Now that the Timberland® brand is part of VF, the brand has a unique
opportunity to leverage VF’s platforms, including consumer insights,
supply chain and global distribution, to reach its full potential while
striving to reduce its impact on the world.
“The Timberland® brand’s corporate responsibility leadership was
one of the drivers in VF Corporation’s decision to acquire the company
in 2011,” Frisk says. “When a $10 billion apparel and footwear power-
house is attracted to a brand due, in part, to its innovative approach to
sustainability, you know there’s business value there.”
Innovation for Consumers — and their Values
The Timberland® brand’s product development is grounded in
a philosophy of reducing its overall environmental impact. There’s
no better example of how the brand “walks the talk” than its
Earthkeepers® collection.
In a story remarkably similar to the development of the brand’s classic
10061 yellow boot, the Earthkeepers® line began with one designer’s
personal mission to make a better shoe in a more environmentally
conscious way. The breakthrough was to use recycled, organic and
renewable materials. And similar to the 10061, it proved an
instant success.
The Earthkeepers® collection launched in 2007 with just one boot.
Since then, the collection has expanded across footwear, apparel and
accessories. In 2012, it represented more than half of all Timberland®
footwear styles worldwide. The Earthkeepers® collection is now the
Timberland® brand’s fastest-growing and largest product line — a clear
demonstration of the growth potential of eco-conscious products.
“When we set out to create the Earthkeepers® collection, our goal was to
produce footwear that’s as premium as everything else we make — but
with less impact on the planet,” says Pete Lankford, Director, Design,
Timberland® brand.
This year, the Timberland® brand introduced the Earthkeepers®
Hookset Handcrafted Collection, which features a minimal amount
of materials, including organic cotton, natural latex rubber, recycled
aluminum and leather pieces (some of which are scraps). These
recycled, organic and renewable materials are stitched together to
create a stylish, colorful collection of lightweight, fun footwear made
with the environment in mind.
“The Hookset Handcrafted Collection marks a major milestone —
proving that quality, durability and craftsmanship can coexist with
eco-sensitivity and create a remarkable shoe,” Lankford says.
Launched in spring 2012, the collection has exceeded expectations for
both sell-in and sell-through in North America, Europe and Asia. Just as
important, it has the lowest environmental impact in the Timberland®
men’s footwear line.
A Leader in eco-Conscious Materials
The Timberland® brand’s use of environmentally responsible materials
is a vital part of differentiating the brand to drive top line growth, but it
also has bottom line benefits as well.
“We’ve figured out a way to make a dramatically more eco-conscious
product that also helps us grow our business,” says Emily Alati, Director,
Materials Development, Timberland® brand. “To incorporate an
environmental approach, you have to design the product from the
“the hookset handcrafted
Collection marks a major
milestone — proving that
quality, durability and
craftsmanship can coexist
with eco-sensitivity and
create a remarkable shoe.”
— Pete Lankford, Director, Design
Earthkeepers®
hookset Collection
in the raw
Recycled Aluminum
Corrosion resistant for durability.
natural Latex Rubber
The raw material is sourced right from
the living tree.
100-Percent organic Cotton Canvas
Grown without fertilizers or pesticides for
lightweight wearability and durability.
scrap Leather Accent Pieces
Cleverly sourced using leftovers from the
cutting-room floor, the collection has proven
so popular that the brand was forced to use
non-scrap leather to fulfill some orders.
ground up. And that’s just what we did to ensure that all products meet
our style and performance standards, while keeping an eye on cost.”
One key material is recycled polyethylene terephthalate — commonly
known as PET — the plastic used to make water and soda bottles.
Timberland® products use many different materials that incorporate
recycled PET, including SmartWool® faux shearling (made from merino
wool and recycled PET), Polartec fabric and Bionic canvas. The
Timberland® brand has even developed its own sustainable materials
when necessary.
Being transparent with consumers about what is in the products they are
buying is a top priority for the brand. That’s why the Timberland® brand
created its Green Index® rating, a scoring system that allows consumers
to compare the environmental impact of different Timberland® footwear
products.
“Our recycled materials look, feel and perform exactly like brand-new,
virgin materials,” Alati says. “Consumers don’t have to give up anything
to know they are helping make a difference when it comes to the
environment.”
The Timberland® brand‘s commitment to using sustainable materials
also extends to the design and construction of its retail stores. Because
these stores are where consumers go to experience the brand in its
purest form, it is essential that they be built in an environmentally
responsible way. In 2012, the brand added 20 new stores, each one
delivering on the brand’s promise of sustainability. Most Timberland®
brand stores around the world feature re-purposed and reclaimed
fixturing, energy-efficient lighting, low VOC (volatile organic compounds)
paint and more.
Poised to Capitalize on the Global Mega-trend
of sustainability
The strength of the Timberland® brand in international markets was
another one of the key drivers behind VF’s acquisition. The brand’s
product innovation engine, sustainability positioning and global footprint
combined with VF’s operational strengths presents a significant growth
opportunity in key markets.
The Timberland® brand is now VF’s largest business in Asia, but only its
fourth largest in China. But it is now poised to leverage VF’s distribution
network and expertise in consumer insights. VF expects to grow the
Timberland® brand China business by 30 percent annually during the
next five years. “China is not only the No. 1 user of energy in the world,
but it is also the No. 1 user of renewable energy,” says Stewart Whitney,
Vice President & Managing Director, Timberland® brand, Asia Pacific.
“Being an environmentally aware brand is becoming increasingly
relevant, especially to younger consumers around the world. The
Timberland® brand is uniquely positioned to capitalize on this.”
In Europe, the Timberland® brand is elevating its efforts to reach female
consumers by collaborating with Parisian-style icon Nadege Winter and
the U.K.-based charity TRAID to put a contemporary feminine twist on
the classic Timberland® yellow boot. The brand sourced material from
TRAID, which collects discarded scraps from clothing manufacturers
and retailers. Nadege Winter then personally selected pieces of fabric to
make every pair a unique creation. With only 1,600 pairs in key outlets
across four European countries, the Nadege Winter Earthkeepers®
collection is creating a big stir on social networks and blogs, registering
more than 23 million impressions as of year-end.
Having now been part of VF for more than a year, the Timberland®
brand has only just begun to reach its full growth potential. As the brand
marks its 40th anniversary in 2013, the Timberland® brand will be
one step closer to achieving its vision of becoming the world’s leading
authentic, sustainable outdoor lifestyle brand.
20
21
SuStainaBilitY:
the Timberland ®
Brand Walks
the talk
With a 40-year commitment to sustainability in both
words and actions, the Timberland® brand has the
credibility to engage with consumers in an authentic
and environmentally responsible way.
leed Certification
Timberland is the first company to achieve the LEED Retail
certification for mall-based stores.
42%Green Rubber™ Compound
A material made from 42 percent recycled
rubber used in the brand’s outsoles.
S.CaFé®
Fabrics made from recycled
polyester with recycled coffee
grounds added.
59.2%59.2 percent of the Timberland® brand’s footwear contains
recycled materials. This represents 58.6 percent of the total
footwear production shipped in 2011 (excluding licensed footwear).
nutrition label
With green index®
The first of its kind for the retail industry, the nutrition label
communicates corporate level information on environmental impact
while the Green Index® measures product-specific information.
100%Share of the Timberland® brand’s footwear
boxes and tissue made from recycled materials.
4,056,296
Pounds of recycled, organic and renewable materials used in
Timberland® apparel in 2011.
gold- or Silver-
rated tanneries
Those tanneries with the highest rating of environmental performance
as assessed by the Leather Working Group, an organization that
maintains a protocol of the environmental performance of tanners.
92.3 percent of the leather sourced for footwear by the Timberland®
brand comes from a gold- or silver-rated tannery.
70%Renet® nylon
Made of 70 percent recycled nylon from materials,
such as fishing nets, ropes salvaged from the ocean
and post-industrial waste.
232323
Storm rider
The original Lee® Storm Rider® jacket, designed in 1933 for
horseback riders, was thick and bulky to keep them warm and
dry in the backcountry. In 2012, the Lee® brand re-interpreted this
classic product for a new audience — bicycle riders in China.
It‘s now sleek, thin and even warmer. It marks the Lee® brand’s
first use of high-performance bonded fabrics with denim.
1.
Inner Layer
A warm, soft fleece lining
that replaces the original
wool with a brushed tricot
fabric. The stripe is a
direct link to the original
1933 jacket.
3.
outer Layer
A lightweight stretch denim
that allows freedom of
movement, which is vital
for bike riders.
2.
Middle Layer
A breathable PTFE
membrane applied as a
film directly to the denim.
It prevents wind from
penetrating the fabric,
and allows the rider to
stay dry.
re-Made
to laSt
a focus on consumer-
centric innovation
drives the Wrangler®
and Lee® brands to
constantly invent new
products and reinvent
older ones.
Lee Asia: From Horseback to Fixed-Gear Bikes
Lee® Storm Rider® Jacket in China
Brand history has tremendous power with Chinese consumers, giving
the Lee® brand, founded in 1889, a competitive advantage. This
advantage is multiplied by VF’s deep research into consumer insights,
which enables the Lee® brand to uncover locally relevant ways to
connect new products to its heritage and ensure differentiation in an
increasingly crowded market.
Inspired by the emergence of the fixed-gear bike culture among
Chinese youth consumers in fast-growing urban centers, the Lee®
brand has created an entirely new collection of apparel, including
Urban Riders jeans, that connects back to the brand’s horseback-
riding heritage.
One of the Lee® brand’s most famous products, for example, is the
1933 Storm Rider® jacket — a blanket-lined jacket designed for horseback
riders. In 2012, Lee China released an entirely new Storm Rider® jacket
updated for a different consumer in a different time with a different need.
By today‘s standards, the original Storm Rider® jacket was very thick
and bulky, so the Lee® brand developed a new Storm Stopper
fabric — an advanced, bonded material that is warm, but thinner and
more flexible than the original.
“We are inspired by the Lee® brand’s unique heritage,” says David Tring,
Director, Product, VF Asia Pacific. “But we give it a modern twist by
adding performance and functionality. The jacket gives modern riders
the protection against the weather they demand with a unique story that
no other brand can tell.”
vFis home to two of the most iconic jeans brands in the
world. More important than the story of how the Wrangler® and Lee®
brands became global icons is the story of how they stay global icons.
The Lee® brand introduced the first zipper fly in 1926 in its legendary
101Z jean, and was the first brand to create jeans specifically for women
with the 1949 Lady Lee Riders® jeans. In 1947, the Wrangler® brand
created the 47MWZ jean, a blockbuster product so successful that it
remains part of the cowboy “uniform” to this day.
Behind each historic product is a hidden story of a commitment to
innovation, based on understanding consumer needs and creating new
products to meet them. It’s a commitment that continues to this day.
“We‘ve learned over the years that nothing beats incorporating real-time
consumer feedback into the product development process, every step
of the way,” says Tom Waldron, Vice President , Mass Brands, Jeanswear
Americas. “The insights we get from constant contact with our core
Wrangler® brand consumers have been invaluable in helping us deliver
the style and functional benefits they want.”
Together, the Wrangler® and Lee® brands have more than 180 years
of combined history of consumer-centric product innovation. It’s a living
history that continues today with a unique strategy: the Wrangler® and
Lee® brands grow as global icons by focusing on creating products for
the unique needs of each regional market. This decentralized approach
is one that only a company with the reach and resources of VF can
execute. And it’s working, with both brands stronger than ever and poised
for continued growth.
24
1
2
3
4
6 7
iConS
The Wrangler® brand‘s 7 icons were originally created in 1947 to help
cowboys do their jobs. They’ve been a feature of Wrangler® jeans ever
since. Today, they are being reinterpreted for young consumers in
India and Europe.
1. the Patch
Represents tough, top-quality authentic
denim made for the outdoors.
2. Yoke seam over Panel
Along with the high back pockets,
designed to keep the rider’s wallet
from slipping out.
3. seven Belt Loops
Unlike traditional jeans with five belt loops,
Wrangler’s seven loops keep belts from
riding up, ensuring a comfortable fit.
4. Wide scoop Watch Pocket
This deeper pocket has a curved,
ergonomic shape and a high opening
along the waistband to keep items such as
keys and coins secure — and away from
scratch-prone smartphone screens.
5. Flat Rivets
Originally designed to prevent saddle
scratches, today protect motorcycle, bike
and car seats. They also give the jeans a
more refined look.
7. the W stitch
First introduced in 1947, the Wrangler®
brand’s “W,” which is stitched on each
back pocket, represents Western Wear,
a reminder of the jean’s original purpose.
6. Rope Logo
Appearing on Wrangler® products since the
brand’s inception in 1947, the rope is a sign
of can-do attitude of the American West.
the Lee® Brand north America:
A Fit so Perfect, It’s Patent-Pending
Lee® Platinum Label Collection in North America
When the Lee® brand designers set out to create
Platinum Label, a complete collection of denim
exclusively for department stores, they performed
extensive research with women at every stage of the
design process. They analyzed body-shape data
from 5,000 female body scans, then tested each new
fit with more than 300 women of all shapes and
sizes across the country. The end result? Flattering
fits that consumers love, incorporating slimming
innovations — Tummy Slimming, Bottom Shaping
and No Gapping — that the brand has developed
during the last five years.
The collection’s standout is the Perfect Fit Jean with
the Lee® brand’s patent pending “lifts and shapes”
technology. The jeans are specially made with
a mesh panel developed with the help of outside
fabric scientists. The mesh panel, marketed
as Shapetastic™, shapes the tummy while also
providing lift and shape to the backside.
the Lee® Brand europe:
Bringing Affordable stretch to some
of the World’s Most Discerning
Denim Consumers
Lee® Stretch Deluxe Jean in Europe
seams and shallow pockets make the legs look
longer and slimmer. A new back pocket place-
ment flatters a woman’s natural shape. And a
new placement of the front buttonhole creates a
smoother front appearance.
In the face of challenging economic conditions,
the Lee® brand women’s business in Europe
delivered double-digit revenue growth in 2012. A
key driver was the launch of Stretch Deluxe, a
new premium-quality jean that helps women look
their very best — without a premium price.
“The Lee® brand pioneered the art of making
great-fitting jeans for women starting in the
1940s, and we want to continue that tradition,”
says Gilles Laumonier, President, Lee® brand,
Europe. “When women try on Stretch Deluxe
jeans in our stores, they love the way they feel.”
That feeling comes from Stretch Deluxe’s
feminine fit, soft fabric and fashionability. The
jean combines super-stretch, super-recovery
denim and smart design features that lengthen
and slim the female silhouette. Forward side
Wrangler® Western:
Long Live Cowboys — In All the Places
they Live now
The Wrangler 20X® 01 Competition Jean in
North America
Fewer people now make their living by working
the land, yet the Western ethos lives on as
a powerful aspirational lifestyle for millions of
American consumers. Through extensive
consumer insights work, Wrangler® Western has
created the Wrangler 20X ® 01 Competition Jean,
a new jean for “the New Cowboy.” The Wrangler
20X ® 01 Competition Jean features characteristics
of work jeans, such as heavyweight denim, a
roomier leg and a boot cut, but is designed for
consumers to wear for either work or play.
The Wrangler 20X ® 01 Competition Jean is
endorsed by the Professional Rodeo Cowboys
Association (PRCA) and worn by brand advocates
such as professional rodeo athletes Austin Meier,
Silvano Alves and Kaycee Feild, along with
football player Bear Pascoe and country music
artist Cody Johnson.
27
the Wrangler® Brand India: Designed for
the Cowboy, Reinterpreted for the Biker
Wrangler® 7 Icons Collection in India
The original Wrangler® jeans were designed for
working American cowboys. In India, the
Wrangler® brand has taken “7 Icons,” the seven
unique features originally designed for working
cowboys, and translated them for today’s
motorcycle riders.
The 7 Icons Collection reinforces the authentic
heritage of the Wrangler® brand, while simulta-
neously demonstrating that innovations created
decades ago for a different purpose remain
relevant today. Flat rivets originally designed
to prevent saddle scratches now protect the
cover of motorcycle seats. A wide-scoop pocket,
originally designed to protect pocket watches
(the delicate and expensive must-have accessory
of an earlier time), now keeps coins and keys
away from the screens of smartphones (today’s
indispensible device).
The 7 Icons Collection, known as “Ride Ready
Denims Since 1947,” is the perfect example of how
a unique brand story and focus on contemporary
functionality create a powerful combination of
meaning and relevance to consumers.
vF perForManCe
update
VF’s record revenues, profit and cash flow from operations in 2012
were driven by a relentless focus on delivering the industry’s most
innovative products, deepening relationships with our customers
and consumers and driving operational excellence in every area of
our business. Amid a year that included compounding impacts
from two consecutive warmer-than-normal winters and a continued
recession in europe, we are quite pleased to have delivered yet
another year of excellent returns to our shareholders.
• Revenues increased 15 percent to a record $10.9 billion from $9.5 billion in
2011. On a constant dollar basis, full year revenues increased 17 percent.
The Timberland Company (consisting of the Timberland® and SmartWool®
brands) accounted for 9 percentage points, or $907 million, of the revenue
growth in 2012.
constant dollar revenue growth in 2012, and continued to expand distribution
and capture new consumers with industry-leading innovations. Global
revenues for the Lee® brand, which continued to face challenges in the
mid-tier channel in the U.S., were flat on a constant dollar basis. Yet, here
too, our product innovation pipeline is robust, giving us great confidence in
our long-term ability to achieve growth. The real 2012 story in Jeanswear,
however, was the significant improvement in profitability with a 13 percent
increase in operating income and an operating margin reaching 16.7 percent,
moving closer to our historic levels.
Imagewear, VF’s third-largest coalition, has now delivered 11 consecutive
quarters of revenue growth, posting a 5 percent increase in revenues for
the full year with strength on both sides of the business — Image and
Licensed Sports Group.
• Gross margin rose by 75 basis points to a record 46.5 percent, compared
with 45.8 percent in 2011, reflecting the continued shift in our revenue mix
toward higher margin businesses.
• Operating income rose 18 percent to $1.5 billion from $1.2 billion in 2011.
Operating margin was 13.5 percent versus 13.2 percent in 2011, reflecting
a 90 basis point negative impact from Timberland’s operations, in which
margins are lower than VF’s average.
Sportswear coalition revenues were up 6 percent in 2012, with growth in both
our Nautica® and Kipling® (U.S.) brands. Both brands contributed to
the year’s growth and continued improvement in profitability, combining to
deliver a 30 percent increase in operating income and a 230 basis point
improvement in operating margin to 12.6 percent. This improvement for both
brands provides a foundation for what we expect to be a strong contribution
to our portfolio for years to come.
• Net income on an adjusted basis rose 18 percent to $1.1 billion, compared
to $913 million in 2011. On a GAAP basis, net income rose 22 percent, to
$1.1 billion, compared to $888 million.
• Adjusted earnings per share increased 17 percent to $9.63 per share.
On a GAAP basis, earnings per share grew 22 percent to $9.70 per share.
• VF’s cash flow from operations reached a record $1.3 billion in 2012,
which helped fund a 21 percent increase in our quarterly dividend rate,
and marked the 40th-consecutive year of increasing dividend payments
to shareholders.
VF’s strategy is engineered to deliver consistent, sustainable growth. Our
diversified portfolio, brand-building expertise, global expansion efforts,
strong partnerships with wholesale customers, and ability to connect with
consumers through our direct-to-consumer business all contributed to
strong top and bottom line results in 2012.
Coalition performance
In Outdoor & Action Sports, we continued to build on our momentum with
revenues rising by 29 percent. On an organic basis, excluding the results
from Timberland, revenues rose 10 percent. Driving this result were
The North Face® and Vans® brands, which both reached record revenue
levels for the year growing 9 percent and 23 percent, respectively. And
although still quite young in the context of VF’s portfolio, Timberland’s
integration is on track with our expectations. In 2012, Timberland contributed
$1.12 to our full year earnings per share. We remain very excited about
helping this global brand realize its true potential. The profitability of our
Outdoor & Action Sports coalition remains a highlight with a 23 percent
increase in operating income to an operating margin of 17.4 percent — a
strong performance we’re confident we can improve upon in 2013.
In 2012, global revenues for VF’s Jeanswear business were up 2 percent, or
4 percent in constant dollars, a performance that reflected a mid single-digit
increase in the Americas, a high single-digit increase in Asia and a decline
in sales in Europe, where our brands remained strong yet were impacted
by the prolonged recession there. Driven by notable strength in its Western
Specialty and Mass businesses, the Wrangler® brand posted 3 percent
28
And finally, the story in our Contemporary Brands coalition is also one of
both top and bottom line growth. Excluding the John Varvatos Enterprises
Inc. business, which we sold in April of 2012, Contemporary Brands
achieved a 5 percent increase in revenues for the full year. Our 7 For All
Mankind®, Splendid® and Ella Moss® brands each achieved higher
revenues during the year, reflecting growth in their direct-to-consumer and
wholesale businesses. The 37 percent increase in operating income was
quite impressive, representing a 360 basis point improvement in operating
margin over the coalition’s performance in 2011.
positioned to Win
VF’s balance sheet continues to be in great shape. We ended the year with
nearly $600 million in cash after buying back 2 million shares of our stock,
paying down all outstanding commercial paper borrowings and contributing
more than $100 million to our pension plan. Our strong working capital
discipline was also evidenced by a $99 million reduction in inventories
year-over-year. And, we didn’t miss a beat in servicing our businesses’ needs;
on-time shipping performance was at our highest level ever.
In summary, we are thrilled to have wrapped up another great year for VF
and our shareholders, and we have tremendous confidence in our ability to
deliver another year of strong, balanced and profitable growth in 2013. We
are winning and we intend to keep winning.
Bob Shearer
Senior Vice President & Chief Financial Officer
Financial Highlights
0
8
8
,
0
1
$
9
5
4
,
9
$
3
0
7
,
7
$
12
11
10
Revenues
(Millions)
5
7
2
,
1
$
1
8
0
,
1
$
1
0
0
,
1
$
.
0
7
9
$
8
9
.
7
$
8
1
.
5
$
3
0
.
3
$
3
4
.
2
$
1
6
.
2
$
11
12
10
Earnings Per Share
(Dollars)
11
12
10
Dividends Per Share
(Dollars)
11
10
12
Cash Flow from Operations
(Millions)
VF Corporation vs. The S&P 500
Total Revenues By Coalition
S&P 500 Index
VF Corporation
%
0
5
47%
OTHER (1%)
CONTEMPORARY BRANDS
SPORTSWEAR
IMAGEWEAR
%
1
2
%
5
1
%
1
2
%
6
1
JEANSWEAR
26%
Capital gain
Dividend yield
13%
2%
18%
%
2
0%
2%
3%
14%
3%
2%
19%
2%
10
11
12
OUTDOOR &
ACTION SPORTS
10%
5% 4%
54%
3-Year Coalition Revenues and Profits
(Dollars in Millions)
6
6
8
,
5
$
2
6
5
,
4
$
5
0
2
,
3
$
Revenues
9
1
0
,
1
$
8
2
8
$
7
3
6
$
Profits
12
11
10
Outdoor &
Action Sports
9
8
7
,
2
$
7
6
4
$
12
2
3
7
,
2
$
8
3
5
,
2
$
2
3
4
$
3
1
4
$
11
10
Jeanswear
6
7
0
1
$
,
5
4
1
$
12
5
2
0
,
1
$
6
4
1
$
9
0
9
$
1
1
1
$
11
10
Imagewear
7
7
5
$
3
7
$
12
8
9
4
$
2
5
$
4
4
5
$
6
5
$
11
10
Sportswear
9
3
4
$
4
1
$
5
8
4
$
6
3
$
6
4
4
$
9
4
$
11
10
Contemporary Brands
12
5-Year
FinanCial
SuMMarY
ConSolidated
BalanCe SheetS
In thousands, except per share amounts
20128
20118
2010
2009
2008
In thousands
YEAR ENDED DECEMBER
summary of operations 1
Total revenues
Operating income
Net income attributable to VF Corporation
Earnings (loss) per common share attributable to
VF Corporation common stockholders — basic
Earnings (loss) per common share attributable to
VF Corporation common stockholders — diluted
Dividends per share
Dividend payout ratio 2,7
Financial Position
Working capital
Current ratio
Total assets
Long-term debt
Stockholders’ equity
Debt to total capital ratio 3
Weighted average common shares outstanding
Book value per common share
other statistics 4
Operating margin 7
Return on invested capital 5,6,7
Return on average stockholders’ equity 6,7
Return on average total assets 6,7
Cash provided by operations
Cash dividends paid
$ 10,879,855
1,465,267
1,085,999
$ 9,459,232
1,244,791
888,089
$ 7,702,589
820,860
571,362
$ 7,220,286
736,817
461,271
$ 7,642,600
938,995
602,748
9.89
9.70
3.03
31.2%
$ 1,717,371
2.0
$ 9,633,021
1,429,166
5,125,625
26.5%
109,823
$ 46.51
13.5%
16.2%
24.7%
11.9%
$ 1,275,000
333,229
8.13
7.98
2.61
32.7%
$ 1,521,912
1.9
$ 9,313,126
1,831,781
4,525,175
31.9%
109,287
$ 40.93
13.2%
15.8%
22.0%
11.9%
$ 1,081,371
285,722
5.25
5.18
2.43
37.6%
$ 1,716,585
2.5
$ 6,457,556
935,882
3,861,319
20.2%
108,764
$ 35.77
13.3%
15.6%
20.1%
11.8%
$ 1,001,282
264,281
4.18
4.13
2.37
46.0%
$ 1,536,773
2.4
$ 6,473,863
938,494
3,813,285
23.7%
110,389
$ 34.58
11.9%
12.6%
17.2%
9.6%
$ 973,485
261,682
5.52
5.42
2.33
43.0%
$ 1,640,828
2.6
$ 6,433,868
1,141,546
3,557,245
25.2%
109,234
$ 32.37
12.3%
13.5%
18.2%
10.0%
$ 679,472
255,235
1 Operating results for 2010 include a noncash charge for impairment of goodwill and
intangible assets — $201.7 million (pretax) in operating income and $141.8 million
(after tax) in net income attributable to VF Corporation, $1.30 basic earnings per share
and $1.29 diluted earnings per share. Operating results for 2009 include a noncash
charge for impairment of goodwill and intangible assets — $122.0 million (pretax) in
operating income and $114.4 million (after tax) in net income attributable to VF
Corporation, $1.04 basic earnings per share and $1.03 diluted earnings per share.
2 Dividends per share divided by earnings per diluted share (excluding the charge for
impairment of goodwill and intangible assets in 2010 and 2009).
3 Total capital is defined as stockholders’ equity plus short-term and long-term debt.
4 Operating statistics exclude the charges for impairment of goodwill and intangible
assets in 2010 and 2009.
5 Invested capital is defined as average stockholders’ equity plus average short-term and
long-term debt.
6 Return is defined as net income attributable to VF Corporation plus total interest income/
expense, net of taxes.
7 Information presented for 2010 and 2009 excludes the impairment charges for goodwill
and intangible assets as discussed in (1) above.
8 The Timberland Company was purchased on September 13, 2011, and its results have
been included since the date of acquisition.
Assets
Current Assets
Cash and equivalents
Accounts receivable, net
Inventories
Deferred income taxes
Other current assets
Total current assets
Property, Plant and equipment
Intangible Assets
Goodwill
other Assets
Liabilities and stockholders’ equity
Current Liabilities
Short-term borrowings
Current portion of long-term debt
Accounts payable
Accrued liabilities
Total current liabilities
Long-term Debt
other Liabilities
Commitments and Contingencies
stockholders’ equity
Common Stock
Additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings
Total equity attributable to VF Corporation
Noncontrolling interests
Total stockholders' equity
YEAR ENDED DECEMBER
2012
2011
$ 597,461
1,222,345
1,354,158
140,515
135,104
3,449,583
828,218
2,917,058
2,009,757
428,405
$ 341,228
1,120,246
1,453,645
106,717
166,108
3,187,944
737,451
2,958,463
2,023,460
405,808
$ 9,633,021
$ 9,313,126
$ 12,559
402,873
562,638
754,142
1,732,212
1,429,166
1,346,018
$ 281,686
2,744
637,116
744,486
1,666,032
1,831,781
1,290,138
110,205
2,527,868
(453,895)
2,941,447
5,125,625
–
5,125,625
110,557
2,316,107
(421,477)
2,520,804
4,525,991
(816)
4,525,175
$ 9,633,021
$ 9,313,126
30
31
ConSolidated
StateMentS
oF inCoMe
ConSolidated
StateMentS
oF CaSh FloWS
In thousands, except per share amounts
2012
2011
2010
In thousands
YEAR ENDED DECEMBER
net sales
Royalty Income
total Revenues
Costs and operating expenses
Cost of goods sold
Marketing, administrative and general expenses
Impairment of goodwill and intangible assets
$ 10,766,020
$ 9,365,477
$ 7,624,599
113,835
10,879,855
5,817,880
3,596,708
–
9,414,588
93,755
9,459,232
5,128,602
3,085,839
–
8,214,441
77,990
7,702,589
4,105,201
2,574,790
201,738
6,881,729
operating Income
1,465,267
1,244,791
820,860
Interest income
Interest expense
Other income (expense), net
Income Before Income taxes
Income taxes
net Income
net (Income) Loss Attributable to
noncontrolling Interests
3,353
(93,605)
46,860
1,421,875
335,737
1,086,138
4,778
(77,578)
(7,248)
1,164,743
274,350
890,393
2,336
(77,738)
4,754
750,212
176,700
573,512
(139)
(2,304)
(2,150)
net Income Attributable to VF Corporation
$ 1,085,999
$ 888,089
$ 571,362
earnings Per share Attributable to
VF Corporation Common stockholders
Basic
Diluted
Weighted Average shares outstanding
Basic
Diluted
Cash Dividends Per Common share
$
9.89
9.70
$ 8.13
7.98
$
5.25
5.18
109,823
111,904
109,287
111,288
108,764
110,328
$ 3.03
$ 2.61
$
2.43
Basis of presentation: VF operates and reports using a 52/53 week fiscal year ending
on the Saturday closest to December 31 of each year. For presentation purposes
herein, all references to “2012”, “2011” and “2010” relate to the 52-week fiscal years
ended December 29, 2012, December 31, 2011, and January 1, 2011, respectively.
operating Activities
Net income
Adjustments to reconcile net income to cash provided
by operating activities:
Impairment of goodwill and intangible assets
Depreciation
Amortization of intangible assets
Other amortization
Stock-based compensation
Provision for doubtful accounts
Pension funding in excess of (less than) contributions
Deferred income taxes
Gain on sale of businesses
Other, net
Changes in operating assets and liabilities, net of
purchases and sales of businesses:
Accounts receivable
Inventories
Other current assets
Accounts payable
Accrued compensation
Accrued income taxes
Accrued liabilities
Other assets and liabilities
Cash provided by operating activities
Investing Activities
Capital expenditures
Business acquisitions, net of cash acquired
Proceeds from sale of businesses
Trademarks acquisition
Software purchases
Other, net
Cash used by investing activities
Financing Activities
Net increase (decrease) in short-term borrowings
Payments on long-term debt
Proceeds from long-term debt
Payments of debt issuance costs and hedging settlement costs
Purchases of Common Stock
Cash dividends paid
Proceeds from issuance of Common Stock, net
Tax benefits of stock option exercises
Acquisitions of noncontrolling interests
Other, net
Cash provided (used) by financing activities
effect of Foreign Currency Rate Changes on Cash and equivalents
net Change in Cash and equivalents
Cash and equivalents — Beginning of Year
Cash and equivalents — end of Year
YEAR ENDED DECEMBER
2012
2011
2010
$ 1,086,138
$ 890,393
$ 573,512
–
148,969
47,929
41,058
92,814
19,264
(20,198)
(20,797)
(44,485)
(40,931)
(111,571)
87,620
32,382
(74,294)
(18,907)
26,213
(17,005)
40,801
1,275,000
(251,940)
(1,750)
72,519
–
(30,890)
(8,230)
(220,291)
(269,010)
(2,776)
–
–
(307,282)
(333,229)
62,770
47,213
–
(201)
(802,515)
4,039
256,233
341,228
–
127,203
41,708
29,824
76,739
12,490
46,346
(10,867)
–
32,665
(154,487)
(7,509)
(18,449)
(32,898)
2,448
16,009
(10,834)
40,590
1,081,371
(170,894)
(2,207,065)
–
(58,132)
(20,102)
(3,840)
(2,460,033)
250,824
(2,738)
898,450
(55,536)
(7,420)
(285,722)
134,012
33,153
(52,440)
(338)
912,245
15,406
(451,011)
792,239
201,738
116,837
39,373
17,186
63,538
7,441
(45,850)
(92,068)
–
29,179
(12,954)
(114,334)
(7,689)
140,470
27,817
(14,649)
50,889
20,846
1,001,282
(111,640)
(38,290)
–
–
(13,610)
(16,940)
(180,480)
(9,741)
(203,063)
–
–
(411,838)
(264,281)
137,732
8,599
–
(240)
(742,832)
(17,280)
60,690
731,549
$
597,461
$ 341,228
$ 792,239
32
33
vF BrandS
at-a-glanCe
operating
CoMMittee
oUtDooR &
ACtIon sPoRts
Never Stop Exploring®
Founded: 1968
Number of Countries: 65
Equipping people to make a
difference in their world
Founded: 1973
Number of Countries: 80
Off the Wall® Since ‘66
Founded: 1966
Number of Countries: 170
®
Bags and lifestyle essentials
that lighten your day
Founded: 1987
Number of Countries: 67
®
Ready for your every journey
Founded: 1987
Number of Countries: 40
®
Just Passing Through
Founded: 1984
Number of Countries: 72
Built to Resist®
Founded: 1952
Number of Countries: 70
34
Discover Freedom™
Founded: 1967
Number of Countries: 45
Lee North America
Get What Fits®
Founded: 1889
Number of Countries: 76
If it happens in baseball,
it happens in Majestic.™
Founded: 1976
Number of Countries: 27
Feels Good.®
Founded: 1994
Number of Countries: 35
®
Lucy. Let’s Go.
Founded: 1999
Number of Countries: 1
®
Inspired by Travel®
Founded: 1975
Number of Countries: 40
JeAnsWeAR
®
Real. Comfortable. Jeans.®
Founded: 1947
Number of Countries: 76
Wrangler Western
Long Live Cowboys®
®
Wrangler Europe
We Are Animals®
Wrangler South America
Comfort Even More Comfortable
Lee Europe
A Lee Don’t Lie
Lee South America
Move Your Lee
Instantly Slims You®
Founded: 1949
Number of Countries: 2
Advantage By Design™
Founded: 1937
Number of Countries: 12
sPoRtsWeAR
Takes You to the Water
Founded: 1983
Number of Countries: 75
Hard Working Jeans…Guaranteed.®
Founded: 1965
Number of Countries: 3
ConteMPoRARY BRAnDs
The world’s premier brand of
premium denim lifestyle products
Founded: 2000
Number of Countries: 80
®
Sophisticated styles in colorful,
soft and luxurious fabrics
Founded: 2002
Number of Countries: 27
®
Fresh, Flirty and Fashion-Forward
Founded: 2001
Number of Countries: 23
Coveted for its fit, distinctive design
and quality craftsmanship
Founded: 2002
Number of Countries: 1
IMAGeWeAR
Done right.®
Founded: 1923
Number of Countries: 37
™
Because people aren’t fireproof
Founded: 1971
Number of Countries: 28
eric C. Wiseman
Chairman, President &
Chief Executive Officer
Robert K. shearer
Senior Vice President
& Chief Financial Officer
scott H. Baxter
Vice President & Group
President — Jeanswear
Americas & Imagewear
steven e. Rendle
Vice President & Group
President — Outdoor &
Action Sports Americas
Karl Heinz salzburger
Vice President & Group
President — International
Bradley W. Batten
Vice President —
Controller & Chief
Accounting Officer
(retired)
stephen F. Dull
Vice President—
Strategy & Innovation
Michael t. Gannaway
Vice President — VF
Direct/Customer Teams
thomas A. Glaser
Vice President &
President — Supply Chain
susan L. McDonald
Vice President —
Human Resources
Laura C. Meagher
Vice President — General
Counsel & Secretary
scott A. Roe
Vice President —
Controller & Chief
Accounting Officer
Martin s. schneider
Vice President &
Chief Information Officer
Franklin L. terkelsen
Vice President —
Business Development
35
Board oF
direCtorS
StoCK
inForMation
eric C. Wiseman 2,3*
Chairman,
President & Chief
Executive Officer
Director since 2006, Age 57
Richard t. Carucci 1,3
President
Yum! Brands Inc.
Louisville, Kentucky
(Casual dining restaurants)
Director since 2009, Age 55
Juliana L. Chugg 1,2,4
Senior Vice President &
President, Meals Division
General Mills Inc.
Minneapolis, Minnesota
(Consumer food products)
Director since 2009, Age 45
Juan ernesto de Bedout 1,2,3
Former Group President
Latin American Operations
Kimberly-Clark Corporation
Roswell, Georgia
(Consumer products)
Director since 2000, Age 68
Ursula o. Fairbairn 4,5
President & Chief Executive Officer
Fairbairn Group LLC
Sarasota, Florida
(Human Resources consultant)
Director since 1994, Age 70
W. Alan McCollough 4,5
Former Chairman of the Board
Circuit City Stores Inc.
Richmond, Virginia
(National retailer)
Director since 2000, Age 63
George Fellows 1,4
Former President
& Chief Executive Officer
Callaway Golf Company
Carlsbad, California
(Sporting goods)
Director since 1997, Age 70
Robert J. Hurst 2,3,4
Managing Director
Crestview Partners LLC
New York, New York
(Private equity firm)
Director since 1994, Age 67
Laura W. Lang 3,5
Chief Executive Officer
Time Inc.
New York, New York
(Branded media company)
Director since 2011, Age 57
Clarence otis, Jr. 1,2,4
Chairman & Chief Executive Officer
Darden Restaurants Inc.
Orlando, Florida
(Casual dining restaurants)
Director since 2004, Age 56
Raymond G. Viault 2,3,5
Former Vice Chairman
General Mills Inc.
Minneapolis, Minnesota
(Consumer food products)
Director Since 2002, Age 68
Committees of the Board:
1 Audit Committee
2 Executive Committee
3 Finance Committee
4 Nominating and Governance Committee
5 Compensation Committee
* Ex officio member
Left to right: Clarence Otis, Jr., Juliana L. Chugg, W. Alan McCollough, Juan Ernesto de Bedout, Eric C. Wiseman, George Fellows,
Robert J. Hurst, Raymond G. Viault, Ursula O. Fairbairn, Richard T. Carucci, Laura W. Lang
Common stock
Listed on the New York Stock Exchange — trading symbol VFC.
Quarterly Common stock Price Information
The high and low sales prices on a calendar quarter basis for the periods
indicated were as follows:
shareholders of Record
As of January 31, 2013, there were 3,911 shareholders of record.
Quarterly Common stock Price
2012
2011
2010
High
Low
High Low
High Low
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$152.50 $128.92
156.15 132.43
164.35 129.53
169.82 146.11
$100.24 $80.40
109.73 91.60
132.82 101.74
142.50 115.91
$80.99 $70.25
89.23 71.04
82.11 69.24
89.74 78.21
Dividend Policy
Quarterly dividends of VF Corporation Common Stock,
when declared, are paid on or about the 20th day of March, June,
September and December.
Dividend Direct Deposit
Shareholders may have their dividends deposited into their savings or
checking account at any bank that is a member of the Automated Clearing
House (ACH) system. Questions concerning this service should be directed
to Computershare Trust Company, N.A., at computershare.com/investor.
Dividend Reinvestment Plan
The Plan is offered to shareholders by Computershare Trust Company,
N.A. The Plan provides for automatic dividend reinvestment and voluntary
cash contributions for the purchase of additional shares of VF Corporation
Common Stock. Questions concerning general Plan information should
be directed to the Office of the Vice President — General Counsel and
Secretary of VF Corporation.
Corporate
inForMation
Corporate office
VF World Headquarters
105 Corporate Center Blvd.
Greensboro, NC 27408
Telephone: 336.424.6000
Facsimile: 336.424.7696
Mailing Address:
P.O. Box 21488
Greensboro, NC 27420
Investor Relations
Lance Allega
Director, Investor Relations
VF Corporation
105 Corporate Center Blvd.
Greensboro, NC 27408
The following trademarks owned by VF Corporation affiliates appear in this report:
Registered trademarks
20X, 7 For All Mankind, Bulwark, Eagle Creek, Eastpak, Ella Moss, Horace Small,
lucy, Napapijri, JanSport, Kipling, Lady Lee Riders, Lee, Majestic, Nautica, Red Kap,
Reef, Riders by Lee, Rock & Republic, Rustler, Smartwool, Splendid, The North Face,
Timberland, Vans, Wrangler
Done Right, Downtown Showdown, Earthkeepers, Feels Good, Get What Fits, Green
Index, Hard Working Jeans … Guaranteed, Inspired by Travel, Instantly Slims You,
Long Live Cowboys, Never Stop Exploring, NEW DIMENSION, Off the Wall, Real.
Comfortable. Jeans., S. Café, Storm Rider, Triple Crown of Surfing, We Are Animals
trademarks
Advantage by Design, Discover Freedom, FlashDry, If it happens in baseball,
it happens in Majestic, Thermoball, Vault
The following trademarks owned by other companies also appear in this report:
Android, AutoZone, Bionic, DQM New York, Facebook, Foot Locker, Harley Davidson, iPhone,
John Varvatos Enterprises Inc., Kohl’s, Major League Baseball, Men’s Journal, National
Football League, National Geographic, New York Times, Off the Hook, Outside, PET,
Polartec, Popular Mechanics, ReNet, SnowSports Industries America, TIME, TODAY Show,
Tudou, West Coast Customs, X Games, YouTube
36
37
10
12
13
14
10
Performance Product Adds Power
to Nautica
The Nautica® brand launched a raft of new products
with a water-oriented performance dimension to
differentiate the brand and provide new value
to consumers. Features such as moisture wicking,
water repellence and breathability were introduced
across a wide range of products, including Nautica’s
signature Deck Shirt, outerwear, swimwear, shirts,
pants and knits. Fashion and function apparel
that blends style and performance now accounts
for 35 percent of the brand’s assortment.
LiceNsed sPorts GrouP (LsG)
11
First and Fashion
Once upon a time, the philosophy of women’s
licensed sports apparel was “shrink it and pink it.”
Today, VF designs National Football League
apparel that balances fashion and fanwear. The
result is a big win: VF’s new “First and Fashion”
women‘s line led to double-digit sales gains in 2012.
11
®
12
Brompton road, London
The Kipling® brand brought together its design
teams from North America, Europe and Asia to
create a new global retail concept. After the new
design was installed, the brand conducted two
weeks of consumer intercepts at point-of-sale to
gain real-time feedback that will be used to refine
the design.
13
rock & republic: exclusive for Kohl’s
VF is constantly strengthening its relationships
with customers by understanding what’s important
to them and bringing them brands and products
that no other company can offer. The Rock &
Republic® brand, exclusively for Kohl’s, is the
latest example. VF acquired the Rock & Republic®
brand, one of the original premium L.A. lifestyle
denim brands, in 2011. In February 2012, the Rock
& Republic® brand launched at 1,100 Kohl’s stores
and at Kohls.com. The launch has already
significantly exceeded plans — and other major
retail customers have already approached VF to
create similar partnerships.
14
May the Best Bag Win
Young consumers carry world-changing ideas and
ambitions in their Eastpak® brand bags.
“Bag in Town”— an online design competition in
collaboration with the Instituto Europeo de Design
(IED) — gave them the opportunity to focus their
creative energies on the bag itself. Designers in 40
countries submitted 400 ideas for new bags. Six
were selected to be made into prototypes and
60,000 votes were cast online to choose the
best design. The winning design, called AW2B,
features built-in padding that can be inflated to
provide extra protection for laptops, tablets and
cameras, or deflated for extra storage capacity.
The AW2B bag will be part of the Eastpak® brand‘s
2013 collection and marketed worldwide. It will be
the first time the brand has ever sold a product
created by one of its consumers.
20
12
SnapShotS
a look around
the world of VF
™
Brand on Fire
The Bulwark® brand released 451º, a
stunning and thought-provoking eight-
minute film that focuses attention on one
simple fact: people are not fireproof. The
film shows paper sculptor Jeff Nishinaka
constructing an elaborate tableau of an
industrial scene. In the second half of the
film, the sculpture is set on fire. The film,
which The New York Times called “an
unusually arty approach,” successfully
engages customers in a way that elevates
the discussion about fire safety in the
industrial workplace. It’s a compelling
reminder that safety matters because lives
are at stake. The video has been viewed
more than 100,000 times online — an
amazing response to a business-to-business
industrial safety brand.
1
®
reef reaches Beyond the Beach
The Reef ® brand launched two new footwear
collections in 2012 designed to address the
unmet needs of consumers. The REEF RESRV
Collection for men offers more flexibility and more
style. “The RESRV Collection is a premium,
surf-inspired footwear collection that supports a
nomadic traveler’s need for style and comfort,”
says PJ Connell, Director, Marketing. The REEF
Bella Costas Collection for women, featuring
premium leathers and textiles, is a joint
collaboration with artisans in developing countries.
A brushed outsole construction offers women
something more sophisticated than the average
beach shoe. “The launch of Bella Costas opens
the door to so many more new things,” says Kelley
Bruemmer, Director, Women’s Footwear.
2
Flattering Fit solutions
10,000: The number of Riders by Lee® jeans, a
leader in the U.S. mass market channel, sold every
hour on Black Friday in 2012.
3
®
Patented Perfection
The lucy® brand introduced an innovative pant
with a patented design called the Perfect Booty.
This new product is the latest result of the brand’s
active engagement with women and crafting
solutions for their needs. The Perfect Booty pant
will anchor the brand’s reintroduction to consumers
in 2013, positioning the lucy® brand as a premium
activewear performance brand and revitalizing its
appeal to women.
4
And the Winner is … smartwool
SmartLoft Divide Jacket: Winner of a
“Gear of the Show” award at 2012 SnowSports
Industries America Snow show.
SmartLoft replaces down by using wool as insulation
in a lofted application. The garments capitalize
on the benefits of merino next to the skin and are
among the best insulation solutions on the market.
Men’s HyFi Hoody: Winner of a 2012 Men’s Journal
“Gear of the Year” award.
HyFi is a unique, bi-component fabric that allows
merino to be placed next to the skin, while the
nylon-faced portion of the fabric on the outside of
the garment provides wind resistance and greater
protection to the user. The HyFi midlayer is versatile
for use in numerous cold weather activities, such
as running and skate skiing.
®
5
Let’s roll. Let’s carry. Let’s do both.
The Eagle Creek® brand’s revolutionary Flip Switch
wheeled backpack has an innovative feature:
zip-away backpack straps and hip belt that cleverly
store in the bag’s front panel (rather than the back)
for a better carry. The result is a bag that combines
the best features of a rolling bag and a backpack—
without compromise.
2
166
JEANS
SOLD PER MINUTE
1
GEAR
SHOW
OF THE
2012
GEAR
YEAR
OF THE
2012
6
A TOTAL OF
350PARTNERSHIP
DOORS ARE
PLANNED
BY 2017.
3
29%*
INCREASE
IN VF’S INTERNATIONAL
REVENUES
*in constant dollars
4
IN 2012, VF REPORTED
25%
GROWTH
IN ITS DIRECT-TO-CONSUMER BUSINESS
7
9
8
DoUBLE
5
OF MAJOR LEAGUE BASEBALL JERSEYS
®
6
splendid Loves New York
The Splendid® brand opened three stores in 2010,
five in 2011 and eight in 2012. Most notable is the
brand’s SoHo store, its first in the Northeast. “Our
brand’s anchor is in Los Angeles,” says Jonathan
Saven, President & COO, Splendid® & Ella Moss®
brands. “Having a store in New York, with its
traffic volume and international presence, along
with being able to present the product in such a
unique way, is very special to us.”
7
Jansport x Benny Gold
The JanSport® brand teamed up with San
Francisco-based Designer and Retailer Benny
Gold to create a one-of-a-kind collection that is
deeply rooted in art, design and skateboarding.
®
8
Napapijri Partners up
The Napapijri® brand expanded its successful
partnership store initiative in its home territory of
EMEA, now reaching 145 doors. The strategy
allows the Napapijri® brand to present its premium
lifestyle brand proposition and achieve high
visibility in strategically important retail locations,
while reducing capital investment and risk. A total
of 350 partnership doors are planned by 2017.
9
Wear Your Hero, Whether it’s
a Player or a Brand
VF’s Licensed Sports Group (LSG), which includes
the Majestic® brand, found success by creating
new categories and breathing fresh relevance
into older ones. The Majestic® brand drove double-
digit sales increases of Major League Baseball
jerseys with a combination of new designs and a
“Wear Your Hero” campaign launch that reminded
fans why they wear jerseys in the first place.
LSG also launched a new Harley Davidson®
Performance line — apparel designed to protect
riders in all conditions — and transformed itself
from being a licensor to a true design partner.
responding to the Needs of First responders
The Horace Small® brand had its most
successful product launch in eight years with
NEW DIMENSIoN® Plus. The line combines
innovation in fabric and garment design to
improve comfort, mobility and functionality for
law enforcement and first responders.
change a shirt, change a Brand
One new product, the Crew Shirt, has transformed
the entire Red Kap® brand. With purpose-built
design and innovative fabric technology, the shirt
paved the way for the Red Kap® brand to create
and own a new category of workwear: performance
workwear. In 2013, the brand will continue to
expand its reach in the automotive industry through
distribution with AutoZone and a partnership with
West Coast Customs.
DOUBLEDIGITSALES INCREASE 10
12
13
14
10
Performance Product Adds Power
to Nautica
The Nautica® brand launched a raft of new products
with a water-oriented performance dimension to
differentiate the brand and provide new value
to consumers. Features such as moisture wicking,
water repellence and breathability were introduced
across a wide range of products, including Nautica’s
signature Deck Shirt, outerwear, swimwear, shirts,
pants and knits. Fashion and function apparel
that blends style and performance now accounts
for 35 percent of the brand’s assortment.
LiceNsed sPorts GrouP (LsG)
11
First and Fashion
Once upon a time, the philosophy of women’s
licensed sports apparel was “shrink it and pink it.”
Today, VF designs National Football League
apparel that balances fashion and fanwear. The
result is a big win: VF’s new “First and Fashion”
women‘s line led to double-digit sales gains in 2012.
11
®
12
Brompton road, London
The Kipling® brand brought together its design
teams from North America, Europe and Asia to
create a new global retail concept. After the new
design was installed, the brand conducted two
weeks of consumer intercepts at point-of-sale to
gain real-time feedback that will be used to refine
the design.
13
rock & republic: exclusive for Kohl’s
VF is constantly strengthening its relationships
with customers by understanding what’s important
to them and bringing them brands and products
that no other company can offer. The Rock &
Republic® brand, exclusively for Kohl’s, is the
latest example. VF acquired the Rock & Republic®
brand, one of the original premium L.A. lifestyle
denim brands, in 2011. In February 2012, the Rock
& Republic® brand launched at 1,100 Kohl’s stores
and at Kohls.com. The launch has already
significantly exceeded plans — and other major
retail customers have already approached VF to
create similar partnerships.
14
May the Best Bag Win
Young consumers carry world-changing ideas and
ambitions in their Eastpak® brand bags.
“Bag in Town”— an online design competition in
collaboration with the Instituto Europeo de Design
(IED) — gave them the opportunity to focus their
creative energies on the bag itself. Designers in 40
countries submitted 400 ideas for new bags. Six
were selected to be made into prototypes and
60,000 votes were cast online to choose the
best design. The winning design, called AW2B,
features built-in padding that can be inflated to
provide extra protection for laptops, tablets and
cameras, or deflated for extra storage capacity.
The AW2B bag will be part of the Eastpak® brand‘s
2013 collection and marketed worldwide. It will be
the first time the brand has ever sold a product
created by one of its consumers.
20
12
SnapShotS
a look around
the world of VF
™
Brand on Fire
The Bulwark® brand released 451º, a
stunning and thought-provoking eight-
minute film that focuses attention on one
simple fact: people are not fireproof. The
film shows paper sculptor Jeff Nishinaka
constructing an elaborate tableau of an
industrial scene. In the second half of the
film, the sculpture is set on fire. The film,
which The New York Times called “an
unusually arty approach,” successfully
engages customers in a way that elevates
the discussion about fire safety in the
industrial workplace. It’s a compelling
reminder that safety matters because lives
are at stake. The video has been viewed
more than 100,000 times online — an
amazing response to a business-to-business
industrial safety brand.
the laSt
Word
star Power Behind the Camera and Designer’s table
Most apparel brands put celebrity endorsers in front of the camera. The
7 For All Mankind® brand took a different approach in 2012, enlisting Oscar®-
nominated Actor and Filmmaker James Franco to direct a series of fashion
films for the brand. The films have been viewed more than 7 million times on
the brand’s YouTube® channel and on Tudou (China). Franco also created a
collection of limited edition T-shirts, his first for any brand, that feature some
of the more than 3,100 Polaroids taken by the artist during his film shoots.
In 2013, the campaign will expand significantly, with a new twist enabled by
technology and social media. The brand is creating an interactive experience
that will allow consumers to view the story one part at a time and vote on how
they want it to unfold. These new films engage its millennial consumers and
build brand affinity.
38
Concept/Design
And Partners, NY
andpartnersny.com
Illustrations
Oliver Barrett
executive Photography
Peter Ross
J Knight Photography
VF Corporation
105 Corporate Center Blvd.
Greensboro, NC 27408
336.424.6000
For additional content visit:
vfc.com
5 Powerful
Brands
That Never
Stand Still
2012 Annual Review
& Performance Update
+A Snapshot Of Other VF Brands
On The Move