2024 may be a tough year for VF Corporation.
In the past week, the company's stock price has been below $13 per share, and the closing price of $12.12 on April 12th set a record for Weifu's lowest stock price in nearly a year.
Weifu Group was founded in Pennsylvania, USA in 1899 and has a history of 125 years. The group is the parent company of well-known brands Vans, Supreme, The North Face, and Timberland.
Weifu's latest financial report was released on February 6th. This financial report covering the third quarter of fiscal year 2024 shows that during the third quarter of fiscal year 2024 ending on December 30, 2023, the group's revenue was $3 billion (approximately RMB 21.94 billion), a year-on-year decrease of 16%.
By brand, the four major brands of the group, Vans, Dickes, The North Face, and Timberland, all experienced a decline in the quarter: Vans experienced the most significant decline, with sales plummeting by 28% to $668 million, compared to $926 million in the same period last year; The quarterly revenue of 1.192 billion US dollars in the north decreased by 10% year-on-year; Timberland and Dickes fell 21% and 16% respectively to $473 million and $147 million; Other brands achieved sales of $479 million this quarter, a decrease of 6%.
Interface News found that in the past two years, the top leaders of the four major brands under Weifu Group have undergone changes.
Kevin Bailey, the global brand president of Vans appointed by the group in March 2022, resigned in 2023; In June 2022, Nicole Otto, the new Global Brand President, was welcomed to the North, mainly responsible for DTC business and brand digital transformation. Previously, she served as the Vice President of Nike's North American Digital Department; In April 2023, Todd Dalhausser, former brand president of Altra, a running shoe brand under Weifu, changed his identity to become the global brand president of Dickies; Tina Flood, the new coach of Timberland, took office at the end of 2023.
The most worthy alarm for Weifula is the rare decline in the north. It should be noted that in multiple quarters of the 2023 fiscal year, North has always been the growth "lone seed" among the four major brands, providing new performance increments for the group.
The North entered the Chinese market very early, as early as 2000, this outdoor brand entered the Chinese market through franchising. It was not until 2007 that Weifu regained the agency rights of the relevant companies in the Chinese market, and the group directly managed the business in the north in the Chinese market.
At that time, the outdoor market in China was not yet fully developed, with many opportunities and still considered a blue ocean. But for today's North, the intensity of competition in the outdoor field has increased by several levels.
According to the outdoor brand sales list of Tmall's 2023 Double 11 Shopping Festival, the North, which ranked first in 2022, has fallen to second place, replaced by the domestic brand Camel. In addition, Berkshire ranks fourth, while Kellogg Stone ranks in the top ten.
A group of domestic outdoor brands, represented by Camel, focus on cost-effectiveness and form a surrounding trend below the north. On the north side, high-end brands represented by Archaeopteryx are no longer limited to professional outdoor fields, trying to move towards outdoor trends and even labeling themselves as "light luxury". At the same time, the mid-range price range in the north is also surrounded by wolves: a series of professional outdoor brands such as Colombia, mammoth, and wolf claws are eyeing the market share in the north.
Of course, the country that has been conquered in the past few years by relying on the "school uniform" (north down jacket) is still here.
In this quarterly financial report of "stalling" in the north, Weifu separately disclosed the data of the north in the Chinese market, clearly hoping to boost investor confidence with this data: while the overall revenue of the north brand has declined by 10%, the data for the Greater China region is impressive, with revenue rising by 31%.
The Chinese market will definitely be a key market for Weifu in the coming years. In 2021, Weifu relocated its brand operations center in the Asia Pacific region from Hong Kong to Shanghai. In 2023, Weifu announced an increase of approximately RMB 30 million in investment to upgrade the automation capabilities of its China operations center, with an expected increase of 15% in cargo storage capacity. Previously, this center mainly served the north: it was responsible for approximately 80% of order sorting, distribution, and cargo handling tasks in the north.
During an interview with Interface News at the end of 2023, Dong Li, Vice President and Executive Director of the North Asia Pacific region, once said: "We dare not directly reach a conclusion on how much outdoor clothing in China can grow.". Simply looking at the total volume, we are indeed lower than Europe and the United States, but in terms of incremental growth, the Chinese market is actually ahead of the other two regions.