Kevin Bailey’s goals for Vans Inc. seem quite ambitious.
The president of Vans and VF Corp.’s action-sports division said the Cypress-based footwear and apparel brand will reach the $2.2 billion revenue mark by year-end.
Revenue will rise to $2.9 billion by 2017, should the retail stars align with Bailey’s vision.
He’s no dreamer—Vans’ sales jumped 17% last year to $2 billion.
Where will he find another $1 billion in new business in three years, though?
Vans’ Greensboro, N.C.-based parent has had that in mind since 2012, Bailey said, when it identified the Asia Pacific market as “Vans’ fastest growth region,” with revenues “expected to nearly triple by the end of 2016 to $170 million.”
VF Corp. doesn’t break down revenue figures per region, but it may have underestimated the Asia Pacific market’s potential—the market’s 2014 sales were about $200 million and growing quicker than the Americas and Europe combined.
Vans, is “seeing strength across the board” in the region, Karl Heinz Salzburger, VF Corp.’s vice president and group president of the international division, said during an earnings call last week.
Asia is clearly gaining steam.
“The quarter’s revenues were up more than 50%,” he said, “with particular strength in China and Korea.”
Americas, European Region
The Americas market accounted for about 60% of the brand’s full-year sales; its fourth-quarter revenues increased 20%. The European region represented about 30% of the brand’s revenue, with a “high single-digit” sales increase in the fourth quarter.
Vans, which has 357 stores in the U.S., is seeing strengthened sales for its recently introduced weatherized footwear designed to keep one warm and dry in a cold climate, Heinz Salzburger said. It’s also getting results from the rest of its localized product line, including apparel.
And there’s plenty of room to grow.
“Vans is still relatively new as a brand in the Asia-Pacific region,” Bailey said. “Over the next two years, we will continue to build our consumer proposition through region-appropriate product, marketing and distribution. We are still in the early stages of expansion with a massive opportunity and are carefully building the strategies to ensure long-term success.”
Vans, whose global marketing budget is an estimated $120 million, studies consumers and adapts as it builds “a strong global youth culture brand,” he said, adding that the company relied on VF Corp.’s Consumer and Shopper Insights group to retrieve data on the “needs and opinions” of shoppers in Asia-Pacific.
Experiential marketing, social media, and other digital platforms, gives the brand the ability to “constantly engage in live, two-way conversations” with customers, Bailey said. “That is invaluable to reading and reacting to the consumer in real time.”
The brand, for example, “completed an incredibly successful House of Vans tour” in Guangzhou, Shanghai and Hong Kong in China, and Seoul in South Korea, Heinz Salzburger said.
The venues provided space for young people to “celebrate creativity” through skateboarding and art, as well as and music by two East Los Angeles punk-rock bands.
Last Year’s Events
Vans’ events schedule last year also included a retail roadshow in several cities in China; an Asia-Pacific skate tour; and “an experimental retail store in Seoul that brought the House of Vans ‘elements of life’— music, local artist galleries—(and) special-edition product to the retail environment,” Heinz Salzburger said. “We have definitely been busy making some great connections with our consumers in 2014 and look forward to building on this momentum in 2015.”
Vans is the second VF Corp. brand to pass the $2 billion revenue mark after The North Face. VF Corp.’s portfolio of outdoor apparel brands also includes Timberland, Kipling, Jansport, Reef and Eastpak.
It offers denim under the Wrangler, Lee, Riders and Rock & Republic names, and its premium lifestyle apparel labels include 7 For All Mankind, Splendid and Ella Moss.
VF has a market value of about $32.4 billion.
