Kontoor Brands was part of the minority of companies well-positioned for the challenges brought on by the Covid-19 pandemic. Despite significant business impacts on Q1 revenue and profit, the company’s Lee and Wrangler brands are bouncing back.
On Monday, the company held its first-ever virtual investor day detailing progress and areas of focus for the next few years. Executives expressed optimism for the brands’ revenue and consumer growth, which they plan to accomplish through geographic expansion and category extensions.
Having the right talent is reportedly a major part of the brands’ anticipated growth. Recently, Kontoor onboarded several new hires, including its first-ever heads of global design for Wrangler and Lee, and Karen Smith, who at the beginning of the month assumed the role of executive vice president of supply chain.
Also part of the leadership team is Chris Reid, Kontoor’s vice president of global digital. Kontoor president and CEO Scott Baxter explained that Reid’s appointment is crucial to its continued success.
The company’s growth has been driven by strategic digital initiatives, including partnerships with the online channels at Amazon, Walmart and Kohl’s—what Baxter called “winning with the winning retailers.” The company invested in a new market-leading e-commerce platform, enhanced demand generation capabilities and updated its websites for an improved path to purchase—and the upgrades are working. From Q1 2020 to Q1 2021, the company experienced a 57 percent increase in e-commerce revenue, and plans to add $150 million in revenue in the next three years.
Executives highlighted Wrangler’s unprecedented growth. Tom Waldron, executive vice president and Wrangler global brand president, said the label is “currently experiencing momentum globally like we have never seen” in its 75-year history.
NPD says Wrangler is the national market share brand leader across men’s denim, men’s casual pants, men’s woven shirts and men’s casual shorts. It’s projected to increase revenue from $1.4 billion to $1.7 billion by 2023.
“We are now creating global campaigns rooted in our heritage, and in an incredibly authentic but relevant way that connects emotionally with our existing consumers, and as important, brings the Wrangler brand to new consumers,” Waldron said.
To expand to new consumers, Wrangler will lean into increasingly successful categories, including outdoor and women—two categories it combined when recently launching the women’s All-Terrain Gear (ATG) line in the U.S. In 2022, Kontoor plans to have ATG in five of the seven continents.
Kontoor is doubling down on the outdoor category’s success and announcing a new collection, Wrangler Angler, which is designed specifically for the rapidly growing fishing segment. Launching next year, the collection directly responds to the number of consumers taking up recreational fishing, and aims to be the go-to apparel choice for fishing garb for men and women.
Wrangler is also working towards elevating its product, as it targets partnerships with premium players such as Nordstrom, Free People and Urban Outfitters. “We must penetrate new channels with clear product strategies—strategies that deliver new business in the premium specialty sporting goods and club channels,” said Jenni Broyles, vice present, U.S. general manager, Wrangler.
Moving forward, Kontoor stated that it will continue launching engaging collaborations with popular TV shows—Wrangler saw great success with its “Rick and Morty” and “Stranger Things” collaborations earlier this year—and enhance its connected shopping experience through social channels.
The brand will also sustain its success by further expanding upon its placement in China. In December, Wrangler launched in China through a digital partnership with Alibaba Group’s Tmall e-commerce site, taking notes from its other heritage brand, Lee, which has been in the region for 25 years.
Lee’s fruitful future
Lee is also expanding its footprint around the world. In Q4 2020, Lee revenue increased 1 percent, mainly within its Chinese and European business, which rose 11 percent and 5 percent, respectively.
By 2023, it aims to increase brand revenue from $700 million to $1 billion—another $300 million projected increase.
Chris Waldeck, executive vice president and global brand president at Lee, attributed much of the recent success and hope for a promising future to the brand’s licensing collaboration with H&M and their shared sustainability goals, which he believes will help it target a younger, new consumer. The line featured 100 percent recycled cotton jeans, along with cotton-free denim made with Tencel, water-saving dyes and lower-impact denim washes.
The partnership brought Lee into over 1,000 doors across 61 countries. Like Wrangler, it plans to double down on this strategy and accelerate positioning through collaborations and a “premiumization” of the brand.
According to Waldeck, the opportunities for Lee expansion are endless. “We believe Lee is significantly underpenetrated today, and we have opportunities to propel growth in our largest market through investments in elevated design, product innovation and demand creation,” he said.