North Face 2005 Annual Report Download - page 16

Our Kipling®brand
offers a broad range
of fun, colorful and
fashionable bags.
International Outdoor
revenues increased
more than 35% in 2005.
The Napapijri ®brand’s
fastest growing product
category is women’s
sportswear, which was
up nearly 60% in 2005.
What were the
highlights of 2005?
How will you grow the Kipling®
and Napapijri®brands?
What are your international
retail expansion plans for
The North Face®brand?
How did the Eastpak®brand
perform in 2005, and what’s
planned for 2006?
What areyour plans for
the Vans®brand in Europe?
VF Corporation 2005 Annual Report
28 29
International Outdoor had an outstanding year. Revenues were up
more than 35% and profits rose as well. We continue to see strong
momentum in The North Face® ,Vans® ,Kipling®and Napapijri®brands.
During the year we completed the integrations of the Kipling® ,
Napapijri ®and Vans®brands’ international businesses, in most cases
exceeding our acquisition plans. The continued expansion of our
retail store base also helped to fuel our performance, as we opened
atotal of six owned retail stores for our brands. We established a new
International Outdoor headquarters in Lugano, Switzerland, and suc-
cessfully relocated the European businesses of our Vans ® ,Napapijri® ,
Nautica®and Reef ®brands there.
Because retail stores are a primary growth vehicle for our Kipling®
brand of women’scasual bags, we plan to open five new stores in
2006 from the current base of 13. We also plan to add over 25 addi-
tional partnership stores to the current base of 114. Tobuild our whole-
sale business in key markets such as the U.K., France, Germany and
Spain, we areadding new fixtures and shop-in-shop programs. Asia,
Japan and Korea aregrowth markets, and we will establish operations
in Hong Kong in 2006.
For Napapijri® ,our premium outdoor sportswear brand, we’ll focus on
growth outside its coremarket of Italy.Growth will be driven in both
specialty retail stores and through Napapijri ®brand retail stores. New
stores are slated for St. Tropez, New York City and Miami in 2006. We’ll
also use partnership stores as a means of expansion, with six new
locations planned for 2006, including Tokyo, off a current base of 17.
Women’s sportswear is the Napapijri ®brand’s fastest growing product
category—up nearly 60% in 2005—and we’ll continue to invest in
growing this business. Growth was hampered during 2005 due to
supply chain difficulties, but these have largely been resolved.
The North Face®brand’s strength gives us ample opportunities to add
new retail stores worldwide. Our first store will open in Chamonix,
France in the fall of 2006. We’ll also be adding 10 partnership stores in
2006, bringing the total of such stores to 21. We established a new
distributor in Australia and installed leadership to expand the brand in
Russia. In addition, Eastern Europe continues to offer good potential
for expansion.
Performance was stable in 2005. Our Eastpak®brand continues to be
the top daypack brand in Europe among young trendsetters. To bring
the brand to the next level, we’re launching a new shop-in-shop
concept with key customers in 2006, adapting the innovative fixturing
used in our Eastpak®brand storein Milan. We’re exploring brand
extensions such as apparel, which we launched on a test basis in 2005
and plan to expand this year.In Asia, we appointed a new distributor
for Hong Kong, Japan and Korea.
We’ll take advantage of the brand’smomentum with the rollout of addi-
tional stores and expansion into new markets. Wehave a successful
Vans®brand storein London, added a storein Paris in late 2005 and
plan two additional stores in 2006. We’ll also establish the brand in Italy
by mid-2006. As in the U.S., we anticipate the launch of Vans®branded
apparel in Europe will be an important contributor to futuregrowth.
Outdoor
International