Timberland’s performance pleases new owner
‘Strong momentum story for us,’ says VF Corp. CEO
VF Corp. was still paying for the 2011 acquisition of Stratham-based Timberland in 2013, but executives at the South Carolina-based apparel conglomerate seem very pleased with the performance of their relatively new Stratham-based footwear and apparel brand.
Timberland’s revenues rose 5 percent for the year, matching VF’s 5 percent revenue growth (the company totaled $11.4 billion in revenue for the year).
“We're really starting to see our efforts and plans come together for this brand,” said VF CFO Bob Sherer last week, according to an earnings transcript provided by seekingalpha.com.
He added that it is “great evidence that all the work we concentrated on since the time of this brand's acquisition is paying off. Timberland has been and will continue to be a strong momentum story for us.”
And Steve Rendle, VF’s group president of Outdoor and Action Sports, predicted that sales of Timberland branded merchandise will grow 10 percent on a global basis in 2014, outpacing VF’s predicted revenue growth of 7 or 8 percent.
“We've got fantastic momentum going into the year, and we are very excited about the disciplined success the brand continues to earn,” Rendle said, adding that a global marketing campaign is “positioning Timberland as an outdoor lifestyle marquee for footwear, apparel and accessories.”
Indeed, he said, the company is counting on VF’s new center for excellence for innovation in footwear – located at Timberland's global headquarters in New Hampshire – to benefit its other footwear brands as well.
Still, VF would like Timberland to be a bit more profitable. Currently, margins are about 11 percent, up from 8 percent at the time of the acquisition, but not as high as VF’s goal of achieving a 15 percent by the fifth year following the acquisition.
“There is just no reason that the operating margin for Timberland shouldn't be at frankly the levels that we see overall for Outdoor & Action Sports businesses,” said Sherer. Neither executive said how the margin gains would be achieved.