North Face 2013 Annual Report Download - page 25

At VF, we think of ourselves as
brand builders, not retailers. It may
sound like a subtle distinction. But
it makes a big difference in driving
our decisions and investments. We
work with our portfolio of brands
to optimize their growth, while we
connect with consumers  in stores
and online  to build relationships
based on mutual trust and loyalty.
The success of our One VF direct-
to-consumer business platform
flows from three growth strategies:
continuously driving comp-store
performance, opening new stores
that feature the right brands in the
right locations and accelerating our
e-commerce sales. It’s rooted in our
belief that building strong, direct-to-
consumer connections is as much
an art as a science. It requires focus,
discipline, data-driven decision
making and engaging brand
storytelling that fuels growth.
In the grand scheme of things,
we’re relatively young in our
direct-to-consumer journey, having
launched these businesses with
full strategic focus in 2006. Since
then, we’ve built this platform into
a high-performance mix of full-price
stores, outlet stores and e-commerce.
And the growth has been terrific.
Our 2013 direct-to-consumer revenue
reached $2.6 billion, reflecting
22 percent of the company’s revenue.
By 2017, we expect direct-to-consumer
revenue to reach $4.4 billion, or
25 percent of VF’s anticipated total
revenue  a five-year compound
annual growth rate of 14 percent.
And this growth will be well-balanced
across all direct-to-consumer channels
and geographies. In fact, between
2012 and 2017 we expect a compound
annual growth rate of 12 percent in
the Americas, 21 percent in Europe
and 15 percent in Asia Pacific.
At the same time, we anticipate
combined annual growth rates for
full-price stores, outlet stores and
e-commerce of 14 percent, 9 percent
and 25 percent, respectively.
By any measure, direct-to-consumer
is a powerful, profitable growth
platform for our brands. And there’s
plenty of untapped potential ahead.
Consider this: Across our brands,
VF had 1,246 stores at the end of
2013, but only three of our brands
had more than 100 stores around
the world. Clearly, a robust growth
trajectory lies ahead of us. Our goal
is to reach 1,775 stores by the end
of 2017, with about two-thirds of
our new store openings coming
from outside the United States.
GOING DIGITAL
“E-commerce is VF’s fastest-growing consumer channel, accounting for 13 percent of our direct-
to-consumer sales in 2013. It includes consumer connections through all devices including
desktops, tablets, mobile phones and social media. VF’s Project Digital Excellence is focused on
creating operational efficiency in the digital age. It’s about building an e-commerce platform we
can leverage across all of VF’s brands and geographies. It’s about connecting with consumers …
in all the ways they connect with the world.”
Mike Gannaway
Vice President – VF Direct/Customer Teams
1
,246
OWNED STORES
14
BRANDS
17%
2008-2013 (5-year revenue CAGR)