Is a $3.37 billion revenue goal slightly “off the wall,” even for action sports industry superstar Vans Inc.?
Its parent, VF Corp., doesn’t think so, perhaps encouraged by the Cypress-based brand’s upward trajectory from $1.5 billion to $2.3 billion in sales over the past five years.
Greensboro, N.C.-based VF, which acquired Vans in 2004 for $396 million, introduced its 2021 Plan at an investor’s day conference on March 30. It projects Vans’ compound annual growth rate for the next five years will be 8% to 10%, fueled by international expansion and its direct-to-consumer business.
Vans Global Brand President Doug Palladini said he’s “very proud of the growth that Vans has achieved,” and that he believes “there is tremendous runway for us to continue to focus and drive our business forward.”
The U.S. share of Vans’ revenue pie will drop from 55% to 48% in the five-year period, while the Asia Pacific region is projected to bring in about $650 million, or 19% of the total and up from 13% last year.
“We’re still relatively underpenetrated in many of the markets that are important to us, including big markets like China, but particularly across Asia and in certain parts of Europe,” said VF International Group President Aidan O’Meara. “We also have a good track record of consistent sustainable growth, which gives us great confidence in the plan.”
China, home to a third of the world’s millennial generation, is on track to deliver 11% of Vans’ total sales, or about $370 million, up from 7% last year, or $161 million.
The brand’s global wholesale growth will “come from athletic specialty and sporting goods,” Palladini said, and account for 43% of revenue, down from 52% last year.
Vans stores will likely hold ground at 41%. The brand opened its first one in 1966 in Anaheim and now has about 1,600 around the world. Palladini said there are about 950 in the Asia Pacific region, 272 in Europe, the Middle East and Africa, and 462 in North America.
Its e-commerce business, now at 7%, is poised to pick up 16% of total sales within five years.
Palladini also said Vans, which has more than 31 million followers across various social media platforms, is “part of popular culture, not a sponsor of it … We really believe that’s what’s behind yielding the growth that we have had and will continue to have.”
VF has market value of about $22.4 billion and owns a roster of apparel and footwear companies that includes The North Face, Timberland, JanSport, Wrangler, Reef and Nautica.
