North Face 1999 Annual Report Download - page 8

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KNITWEAR
Overview
Our Knitwear business, which focuses on fleece, t-shirts
and other casual apparel, is divided into two categories:
Printwear/Private Label includes sales to the wholesale
screenprint channel under the Lee Sport brand as well as
sales to customers such as Nike, JCPenney and Target.
Our Licensed Sports unit is the market leader in providing
a variety of knitwear products that carry the names and
logos of professional sports teams and NASCAR drivers.
Market Trends
Consumer demand for basic t-shirts and fleece products has
remained relatively healthy. However, for the past several
years, the knitwear market has been hurt by competitive
pricing pressures, which have challenged the profitability
of most industry participants. While overall demand for
licensed sports knitwear has been declining, some cate-
gories, NASCAR, for example, are showing solid growth.
Focus 2000
VF’s Knitwear business has withstood the pressures
affecting its industry. The coalition has made excellent
progress in lowering its cost structure and maintaining its
profitability in a difficult market. Our NASCAR business
continues to grow rapidly, and we have established a new
and growing Corporate Casuals business, which includes
customized shirts, knitwear and other apparel for company
employee programs.
WORKWEAR
Overview
Through our Red Kap unit, VF has long held the lead
position in occupational apparel. VF Workwear, having
made several acquisitions since 1996, now comprises three
units: Red Kap, Penn State Textile and VF Uniforms. Our
products span a broad spectrum from basic work pants
and shirts to uniforms for airlines and government organi-
zations, to specialized and protective apparel.
Market Trends
The U.S. market for occupational apparel is fragmented with
many players offering specialized products. Increasingly,
companies and organizations seek to support their images,
brands and services by offering their employees customized
apparel. VF is leveraging its low-cost, high-service capabili-
ties into new product categories through internal develop-
ment and acquisitions.
Focus 2000
In the year 2000 we will concentrate on integrating our
new acquisitions and on sharing the capabilities we have
gained among our units. Our multiple workwear brands,
particularly those most recently acquired, give us entry
into growing markets such as corporate image apparel,
protective apparel and hospitality and cleanroom products
that offer opportunities for additional sales growth. A
number of new business-to-business Internet sites will be
launched within Workwear this year as well.
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