In a sea of blue, don’t underestimate the power of visibility.
“People are much more aware of our brands,” Scott Baxter, president and CEO of Kontoor Brands, the parent company of Wrangler and Lee, told Wall Street analysts last week.
The Greensboro, N.C.-based company raised its 2022 outlook on Thursday, with revenue now expected to exceed $2.7 billion for an approximately 10 percent increase over 2021, and compared to prior guidance of a high-single-digit percentage gain.
Wrangler brand global revenue gained 3 percent to $412 million, with U.S. revenue increasing 2 percent on strength in digital, Western and workwear. Lee brand global revenue grew 6 percent in the period to $264 million, with U.S. revenue up 9 percent, driven by continued strength in demand and increases in digital.
In Kontoor’s first-quarter earnings call, Baxter credited part of the company’s success in creating demand to consistent advertising, which consumers haven’t seen from Wrangler and Lee since Kontoor split from VF Corp in 2019. The company would do a quick hit of promotion and then move on because the budget didn’t allow for long-term campaigns and strategies. “But now our consumers are seeing us do different exciting things…It’s a consistent message and I think that’s been really helpful and it’s been beneficial with the consumer globally too, which is really the key component,” he said.
Both brands have had plenty to promote. Wrangler is in the middle of celebrating its 75th anniversary with collaborations spanning Fender, Twisted X and a spring campaign featuring rock royalty offspring Georgia May Jagger. The heritage brand also teamed with musician Leon Bridges for a custom suit that was made into a NFT, and stepped into resale with a tight assortment of vintage men’s and women’s jeans from as early as the 1950s to 2000, and preowned jeans from 2000 and after.
Meanwhile, Lee has tapped into the “workwear as casual wear” trend by growing its range of heritage pieces for men and women. It was also the key denim partner in The Smiley Company’s 50th anniversary collection that launched with popup shops at Nordstrom and Galeries Lafayette. Next, the brand is gearing up for another collaboration with The Hundreds and will be sponsoring the Bonnaroo Music Festival in June, “reinforcing the brand’s long-standing relationship with music, culture and original expression,” Baxter said.
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All these special collections are being amplified on the brands’ social media channels, which have gained importance as Wrangler and Lee grow their D2C e-commerce business. Compared to last year’s first quarter, global owned e-commerce revenue rose 38 percent.
They also arrive at a pivotal moment when consumers are renewing their closets with casualwear and going to brands that they trust for additional apparel in other categories like outdoor and workwear. Baxter said the company is seeing favorable results as people are socializing again and wanting to be outdoors. Kontoor’s core denim long bottoms business was up 8 percent reported in the first quarter, while additional categories such as workwear increased nearly 40 percent and T-shirts were up over 70 percent.
“When you introduce new categories like T-shirts and outdoor and workwear and you put some really significant investments behind them, you need those engines to work and we’ve got those engines really firing right now,” Baxter said.