Now that it’s clear status quo won’t hold, companies are focused on supply chain overhauls that will bring them closer in line with what the market wants.
VF Corporation introduced its 2021 Strategic Growth Plan Thursday, which it said will address the quickly changing market landscape and deliver on shareholder returns.
“Our 2021 strategic growth plan fuels our aspiration to consistently grow by creating amazing products and brand experiences that transform and improve the lives of consumers worldwide,” VF president and CEO Steve Rendle, said. “We remain sharply focused on our diversified value creation model, which is designed to deliver solid results across the many and varied business cycles and economies around the world.”
VF’s five-year growth plan will center on four focuses: reshaping the company’s brand portfolio and enabling VF’s powerful brands; transforming to a consumer and retail-centric model; elevating direct-to-consumer while prioritizing digital; and distorting investment toward Asia, with a heightened focus on China.
“These choices will be enabled by amplified investments and focus on six critical capabilities, including: design and innovation, demand and creation and brand experience, insights and analytics, retail excellence, demand and supply chain agility, and talent,” VF said.
On the financial side of things, VF said it expects revenue to grow 4 percent to 6 percent between now and 2021, fueled by its Vans, The North Face and Timberland brands, and its international and direct-to-consumer business platforms. Gross margin is expected to reach 51.5 percent, and earnings per share should see a five-year growth rate between 10 percent and 12 percent.
In order to further focus on what VF calls the “increasing weight” of its direct-to-consumer business, the company is shifting its fiscal year end from the Saturday closest to Dec. 31 of each year, to the Saturday closest to March 31.
“The change in fiscal year gives the company greater visibility into projecting revenue growth and planning expenses which will reduce volatility of our results and improve investor communication,” VF said.