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Non-Denim Product Categories Spark Opportunity for Kontoor Brands

Expanding beyond core denim has the potential to be an enormous boon for Wrangler and Lee’s parent company, Kontoor Brands.

During the first half of 2020, Wrangler’s All Terrain Gear (ATG) collection experienced up to triple-digit year-over-year growth with key retail partners. The line is based on high-quality performance outdoor product like moisture-wicking tops and bottoms with utility pockets “at an exceptional value.”

“The nearly $30 billion global outdoor market is poised to accelerate in the post-COVID world and we intend to leverage this…opportunity,” said Scott Baxter, Kontoor Brands president and CEO during the company’s recent Q2 earnings call.

As a denim brand that has an outdoor presence and resonates with consumers who fish, hunt and camp, Baxter sees ATG as a natural extension for Wrangler. Brand recognition, coupled with well-built product and value for the appropriate channels, bodes well for the line’s future.

Plus, “our consumers have been asking us to go ahead and migrate this way,” he said.

ATG presents new distribution opportunities in the outdoor specialty and sporting good channels. Baxter said Wrangler will bring ATG to Europe “in a pretty big way” through a partnership with the Nordic men’s wear chain store Dressmann this fall. It will be available in over 400 Dressmann locations.

Like many brands and retailers are discovering, Baxter said pandemic staples like T-shirts are another bright spot in the company’s arsenal.

To capture share, for the first time, Kontoor hired a “category leader” to focus on T-shirts. The company, Baxter said, is also adding design and marketing talent to define and develop “organic extensions” for its brands, including logo, lifestyle and license products.

Tees are also an opportunity to reach out to new demographics. Wrangler’s recent capsule collection with Bob Marley’s family and a collaboration with Diplo that coincided with the release of his first country album are few of the initiatives that are allowing the brand to reach a younger and more diverse consumer, Baxter said.

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“Expect to hear more on this opportunity in the coming quarters,” he added.

Denim, however, remains Kontoor’s bread and butter and the company is plugging into untapped areas for distribution.

Kontoor is ramping up its distribution for the Lee brand, which will launch at over 2,000 Walmart stores this fall. This follows a successful launch for the brand in China, guided by key partnerships with influencers. Lee sold 4,000 women’s shorts in 25 seconds and 8,000 pairs of jeans in 30 minutes during live-streaming events, Baxter reported.

Wrangler will also launch a collaboration with storied L.A. retailer Fred Segal, which Baxter said will be available at Nordstrom this fall, both in stores and on digital platforms.

Additionally, the heritage brand will make its foray into China this fall with a soft launch, followed by a more robust full launch in Spring 2021. The launch was scheduled for October, but the company made the decision to hold out for a more positive consumer environment.

“We expect the business will take time to scale, but the long-term whitespace opportunity remains tremendous,” Baxter said.