North Face 2004 Annual Report Download - page 23

C H A N N E L S O F D I S T R I B U T I O N
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VF C O R P O R A T I O N 2004 Annual Report
SP OR T SW E AR 2004 was a year of hard
work and tremendous accomplishment
for our Sportswear team.
H aving purchased the Nautica®brand
in 2003, we made great strides in
stabilizing the men’s sportswear
business and getting the brand back
on track for future growth.
When we acquired the Nautica®
brand, we knew from our initial
research that the brand resonated strongly
with both male and female consumers.
In early 2004 we undertook an extensive
study to better understand consumers’
attitudes toward the Nautica®brand as an
important first step toward a broad reposi-
tioning of the brand and an overhaul of its
product lines. W hat has emerged from this
research is a crisp new point of view for the
Nautica®brand. That point of view is captured
in our new advertising campaign and the
Navigate life™tagline, which was launched
in early 2005. The essence of the
Nautica®brand — timeless, energetic,
balanced — is now being reflected in
our entire product line and throughout
all of our consumer communications.
We’re beginning to see our efforts
bear fruit. The product is performing
much better at retail, reflecting an increase in
quality across the board, an emphasis on key
items such as outerwear, swimwear and active
knits, and a more narrowed, focused assort-
ment on the retail floor. Our spring and
summer bookings are on plan and we’re
already seeing a favorable reaction to the
new lines. To support our brand within retail
stores, we’re investing in a new shop-in-shop
concept that will roll out to 150 locations
this year.
Through our furnishings division, Nautica
also makes and distributes men’s and women’s
sleepwear and underwear. We continue
to see opportunities to expand both our
Nautica®Competition line, which features
high performance fabrics in men’s products,
and our women’s daywear line.
Jeans are an important component of the
Nautica®brand, and we expect to lift sales
in 2005 through new fabrics and washes,
and the launch of our Denim Star premium
collection at select locations.
A Strong Brand Across Multiple Categories
As befits its lifestyle appeal, the Nautica®
brand features a global licensed business
in categories such as women’s swimwear,
bedding, neckwear, watches, fragrances,
eyewear and tailored clothing. In 2005 we’re
partnering with our JanSport division to
launch a line of Nautica®brand luggage.
We also have a substantial licensed business
overseas, particularly in China where we
expect to have 200 freestanding stores in
2005, up from 120 in 2004. A new store
featuring both men’s and women’s sportswear
will open in Antwerp in April.
Our pan-European push into sportswear
is well into the planning stages as we prepare
for our launch in 2006. Here, too, we’re
partnering with another VF brand, Napapijri® ,
to leverage their excellence in European
product design. Women’s sportswear under
the Nautica®brand remains another untapped
opportunity, and we expect to make
substantial progress toward defining our
strategy and direction in 2005.
John Varvatos® :Defining Style The John
Var vatos business, which we obtained through
our purchase of Nautica, consists of a
collection of luxury products that feature
signature detailing and an uncompromising
standard of old world craftsmanship.
Comprised of tailored clothing, sportswear,
leather accessories and footwear, the collec-
tion is sold through upscale department and
specialty stores, as well as through four John
Varvatos®retail locations. The brand grew
rapidly in 2004, and we expect another
strong year in 2005.
Sportswear is a relatively new category
for VF, and we’re excited about the possibili-
ties that lie ahead for both our Nautica®
and John Varvatos®brands. O ur experience
to date with Nautica has shown that taking
a great lifestyle brand and applying VF’s
excellence in branding, operations and
financial processes can prove to be a
powerful combination.
Nautica
John Varvatos
B R A N D S U N I T E D S T AT E S
Department Specialty
Store Store
Nautica ●
John Varvatos ●●