Many U.S. apparel makers are ditching acquisitions and store expansion plans to conserve cash amid the consumer-spending downturn. But VF Corp. is taking a reverse tack to survive the turmoil. The largest apparel maker in the world by revenue, VF is continuing to add new retail stores and plans to snap up new brands, said Chief Executive Eric Wiseman.
The Greensboro, N.C., company plans to open at least 70 new boutiques world-wide this year in an attempt to reduce reliance on department stores. Last year, it opened 89 new stores and drew 16% of revenue from its own outlets. It aims to boost direct sales to 22% of revenue by 2012, Mr. Wiseman said. The stores also showcase its brands, which include Nautica, The North Face, Lee Jeans and Vans.
VF declined to provide information on its newer lease rates. But average asking rents at U.S. shopping centers fell 0.4% in the fourth quarter, the largest single-quarter decline since 1999.
VF, which generated $7.6 billion in revenue in 2008, has aggressively moved in recent years to diversify its portfolio. The company went on an acquisition spree, snapping up a dozen new “lifestyle” brands, such as Reef and Lucy.
Although the luxury sector has been one of the hardest hit in all of retail, Mr. Wiseman said that he is looking to buy more contemporary apparel brands.