VF Corp. has big plans for its Vans brand.
At an investor meeting Wednesday, VF set out to grow Vans revenue by $2 billion to reach $5 billion by fiscal year 2023, representing annual growth between 10 percent and 12 percent over the five-year period.
“Since VF’s acquisition in 2004, the Vans brand has grown at a 17 percent compounded annual rate and transformed into a $3 billion global lifestyle brand,” Steve Rendle, VF Corp.’s chairman, president and CEO. “I am confident in the Vans team’s ability to deliver on a bold $5 billion revenue target which will be a key driver of VF’s plan to deliver superior total return to shareholders over the next five years.”
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Over the next five years, VF said the Vans brand expects diversified and balanced growth across all product categories, channels of distribution and geographies, driven by disciplined execution and investment to continue to fuel growth, the company said.
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Financial targets for fiscal 2023 include expected growth in footwear revenue of a five-year compounded annual growth rate (CAGR) between 10 percent and 12 percent. Heritage footwear is expected to increase at a CAGR of 8 percent to 10 percent and Progression footwear is forecast to grow at a CAGR between 14 percent and 16 percent.
Apparel and accessories revenue is projected to rise to exceed $1 billion, which represents a five-year CAGR between 13 percent and 15 percent.
Direct-to-consumer revenue is expected to increase to an estimated $3 billion, representing roughly 60 percent of global brand revenue and a five-year CAGR of 13 percent to 16 percent. VF forecasts direct-to-consumer digital revenue to reach more than $1 billion, representing a five-year CAGR between 30 percent and 35 percent.
Revenue in the Americas region is projected to reach about $3 billion, which represents a five-year CAGR between 10 percent and 12 percent.
“Vans is moving into its rightful place as the No. 3 global sport lifestyle brand by being clear about who we are and who we are not,” Doug Palladini, global brand president, said. “By forsaking ubiquity and instead focusing on Vans’ brand pillars of art, music, action sports and street culture, we continue to generate deep and meaningful consumer connectivity that is growing the Vans family worldwide.”
Vans will remain with VF Corp. alongside brands that include The North Face and Timberland in the planned split of the company into two entities, with jeans brands Wrangler and Lee at the core of a new firm.
In the first quarter this year, Vans revenue increased 35 percent, with more than 33 percent growth across all geographic regions.