North Face 2013 Annual Report Download - page 33

Coalition Performance
Our Outdoor & Action Sports coalition was, once again,
one of the great highlights of 2013, with 9 percent
revenue growth. Our three largest businesses, including
The North Face®, Vans® and Timberland® brands, achieved
healthy global growth of 7 percent, 17 percent and
5 percent, respectively. There were two milestones we’re
particularly proud of: The North Face® brand passed
$2 billion in global revenues, and the Vans® brand
reached $1.7 billion in sales, putting it squarely in place
as VF’s second-largest brand. Revenue growth across
the coalition was balanced by region and channel.
In 2013, global revenues of our Jeanswear coalition were
up 1 percent over 2012. This reflected a low single-digit
percentage increase in the Americas region and a low
single-digit decline in our international business. In
the United States, revenues were negatively affected by
continued weakness in the mid-tier and mass channels,
as well as by more challenged trends in women’s basic
denim. European Jeanswear revenues were up at a low
single-digit rate, as we gained traction with our efforts
to optimize product and distribution, and connect more
effectively with consumers. And in Asia, revenues
were down 8 percent as category-specific inventory
issues tempered our full-year growth.
Imagewear is VF’s third-largest coalition, consisting
of our Image business, which includes occupational
apparel and uniforms, and our Licensed Sports Group,
which features authentic fanwear. Revenues were
down 1 percent in 2013.
VF’s Sportswear coalition had a strong year in 2013,
with revenues up 8 percent. Nautica® brand revenues
were up 5 percent, and our Kipling® brand continued
to show very strong growth, up 29 percent in the United
States. Kipling® is now VF’s seventh-largest brand.
Revenues in our Contemporary Brands coalition,
excluding the impact of the sale of the
John Varvatos®
brand in 2012, were down 2 percent in 2013 compared
with the prior year. This decrease was due to challenges
in premium denim trends, partially offset by higher
direct-to-consumer revenues from new stores and
an accelerating e-commerce business.
Our Focus: Total Shareholder Return
VF’s balance sheet remains very healthy. In 2013,
we repaid all short-term debt, contributed $100 million
to our pension plan, which is now nearly fully funded,
and raised our annual dividend by 21 percent. I’m pleased
to say that in 2013 we returned nearly $700 million
to you, our shareholders, in the form of dividends and
share repurchases.
Our investment thesis is simple: deliver consistent,
long-term value to shareholders by creating sustainable,
profitable growth for our brands. Backed by our unwavering
focus on providing consumers with the industry’s most
innovative apparel and footwear products and by our
proven ability to tell inspirational stories to connect them
with our brands, our confidence in the future is stronger
than it’s ever been. With another record year in the books,
we look forward to performing at an even higher level
in 2014 and beyond.
Robert K. Shearer
Senior Vice President & Chief Financial Officer
“OUR INVESTMENT THESIS IS
SIMPLE: DELIVER CONSISTENT,
LONG-TERM VALUE TO
SHAREHOLDERS BY CREATING
SUSTAINABLE, PROFITABLE
GROWTH FOR OUR BRANDS.”