North Face 2005 Annual Report Download - page 27

The Nautica®brand will
be extended to women’s
sportswear in 2006.
Our Sportswear coali-
tion achieved a 49%
increase in profits due
to higher sales of full-
priced products.
Weopened four owned
Kipling®brand stores in
the U.S. last year, with
additional stores planned
in 2006.
What’s driving higher
sales of Nautica®brand
men’s sportswear?
What’s behind the big
improvement in profitability?
How are Nautica®brand
retail stores performing?
How arethe Nautica®brand
licensed businesses doing?
How are your plans
for launching Nautica®
brand women’s
sportswear progressing?
What are your plans
to expand the Kipling®
brand into the U.S.?
How is your John Varvatos®
brand performing?
VF Corporation 2005 Annual Report
50 51
The market is responding to our clear, defined brand image combined
with higher quality products that embody the Nautica®brand con-
sumer’s balanced, energetic lifestyle.
Higher sales of full-priced products strengthened our bottom line, as
did lower product costs through improved sourcing, better inventory
management and more disciplined expense management. We
achieved a 49% increase in profits despite continued heavy invest-
ments in marketing and in the upcoming launch of Nautica®branded
women’s sportswear.
Total sales in Nautica®brand retail stores in 2005 were up 5% and
comparable storesales rose 2%. Merchandising programs geared
specifically to warm weather locations and our wear-to-work products
both performed well. Weexpect another good year in 2006, as we
adjust the delivery of seasonal merchandise to satisfy our consumers’
demand for “buy now,wear now” products. We’realso looking forward
to opening our first full-price lifestyle storewith a complete array of
Nautica®brand sportswear products in late 2006.
With new leadership in place, our licensed businesses introduced sev-
eral new initiatives and product launches. During 2005, we entered into
new licensing partnerships for fragrances, neckwear and hosiery.
We’re looking forward to the launch in 2006 of our new Nautica®brand
fragrance, Voyage™ .In addition to expanding our furniture and bedding
lines, we’re taking the Nautica®brand into new geographies with our
licensing partners and growing our base of retail stores in China, India
and the Middle East.
This is a significant opportunity for us, and we’re on plan to launch the
Nautica®brand women’s sportswear line this fall with our key depart-
ment store customers. We’ve completed our consumer research and
are finalizing our brand positioning, product assortments and shop
design concepts. We anticipate a favorable reception from consumers
and retailers alike. We’ll then follow up by launching women’s licensed
categories and by entering international markets.
We’re especially enthused about our plans to expand our Kipling®
brand of casual women’s handbags here in the U.S. The Kipling®
brand is well established and growing in Europe, a result of its highly
distinctive, broad range of fun, colorful and fashionable bags. In 2005
we opened four owned stores in the U.S. and added new department
storedistribution. To support future expansion, we’re creating a com-
pelling marketing campaign to raise consumer awareness and
expanding our products in a range of prices. Welook forwardto open-
ing additional stores in 2006 and expanding our wholesale business
as well.
Sales of our John Varvatos®brand of luxury men’ssportswear collec-
tions continue to grow rapidly.Plus, we’reproud of the fact that in 2005
John received the prestigious Menswear Designer of the Year Award
from the Council of Fashion Designers of America (CFDA). John’s
success results from his focus on signature detailing and an uncom-
promising standard of old-world craftsmanship. Highlights in 2005
included the opening of our new flagship store in New York City and
the launch of John Varvatos®SKIN, an assortment of premium skincare
products for men. We look forward to future growth as we expand our
retail store base and continue to build our business in premium depart-
ment and specialty stores.
Sportswear
$