VF Corporation

VF Corporation

Type	Public
Genre	Consumer Goods; Textile-Apparel Clothing
Founded	1899 (as Reading Glove & Mitten Manufacturing Co.)
Founder(s)	John Barbey
Headquarters	Greensboro, USA
Key people	Eric C. Wiseman (CEO)
Industry	Apparel
Revenue	USD 6,138,090,000 (net sales 2006) [1]
Net income	USD 533,520,000 (2006) [2]
Employees	45,500 [3]
Website	http://www.vfc.com

VF Corporation, through its subsidiaries, engages in the design, manufacture, and marketing of branded apparel and related products in the United States and internationally. Its product lines include jeanswear, outdoor apparel, imagewear, and sportswear. VF Corporation owns various brands, including Wrangler, Lee, The North Face, Vans, JanSport, Eastpak, Kipling, Reef, NFL, MLB, Harley-Davidson, and Nautica. The company sells through speciality stores, department stores, licensees, distributors, and company-operated retail stores. [4]

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Company History

In 1899, Reading Glove and Mitten Manufacturing Company was established by John Barbey and a group of investors in Pennsylvania. In 1919, the company begins to manufacture undergarments and the name changes to Vanity Fair Silk Mills. The company goes public in 1951 to finance futher expansion. In 1969, the jeans-maker H.D. Lee Company is acquired and the company changes its name to VF Corporation to cover the expanding lines of apparel. With the acquisition of Blue Bell, Inc. in 1986, the company becomes the world's largest publicly held apparel company. The company continues to expand through the 1990s through a series of acquisitions and licensing agreements in the United States, as well as in Europe. In 2007, VF decides to exit the intimate apparel business. [5]

Historical Financial Information

Five Year Income Statement

Business Strategy

• Build a portfolio of strong brands that deliver great value to consumers.
• Target our brands to reach a variety of consumer segments across all retail channels.
• Grow our international presence.
• Lead the industry in responsive service.
• Maintain conservative financial policies.

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Political and Public Influence

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Corporate Accountability

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Labor

Domestic

"VF employed approximately 45,500 men and women in its continuing operations at the end of 2006, of which 17,300 were located in the United States. (Excluded are approximately 8,700 employees of the intimate apparel businesses accounted for as discontinued operations at the end of 2006.) Approximately 300 employees in the United States are covered by a collective bargaining agreement. In international markets, a significant percentage of employees are covered by trade-sponsored or governmental bargaining arrangements. Employee relations are considered to be good." 10-K 2007

Global

Policy:

• 1997: adopts Global Compliance Principles
• 2000: requires Worldwide Responsible Apparel Production (WRAP) certification of all owned facilities. VF Corporation has been affiliated with WRAP since its inception. Candace S. Cummings (VP-Administration, General Counsel & Secretary) is on the WRAP Board of Directors.
• 2004: joins Fair Labor Association
• "All contracted production must meet VF’s high quality standards. Further, each of the over 1,500 independent contractors that manufacture apparel products for VF must be pre-certified and sign a Terms of Engagement agreement prior to performance of any production on VF’s behalf. These requirements provide strict standards covering hours of work, age of workers, health and safety conditions and conformity with local laws. We also require our independent licensees and their contractors to comply with these standards. We maintain an ongoing audit program to ensure compliance with these requirements by using dedicated internal and outsourced staff." 10-K 2007

Campaigns against company:

• 2001: workers at the International Garments Manufacturing Corp. in the Philippines strike to protest union-busting. Factory produces VF brand Wrangler and for Gap Inc. and these companies are pressured to intervene with factory management through a letter-writing campaign initiated by the Clean Clothes Campaign. Workers were not successful and financial difficulties forced them to accept separation pay. [7]
• 2003: workers at the Jaqalanka Ltd. factory in Sri Lanka are denied unionization. Factory produces for VF brand Red Kap and for Nike. Nike and Free Trade Zone Workers Union requested that Fair Labor Association investigate the dispute. After an FLA investigation and pressure from clients, factory management agrees to recognize union. [8]
• 2004: National Labor Committee includes VF Corporation in a campaign against forty companies producing in Bangladesh. The goal is for firms to pledge to abide by legal labor protections for pregnant women. VF has not signed the pledge. [9]

Major reports:

1. Fair Labor Association's Annual Reports
2. Human Rights Watch, Guatemala Discrimination Against Women Workers 2002

Business Scope

Units/subsidiaries

• Jeanswear coalition
• Imagewear coalition
• Outdoor coalition
• Sportswear coalition
• Contemporary brands coalition

Brands

Jeanswear:

• Wrangler ®
• Lee ®
• Riders ®
• Rustler ®
• Brittania ®
• TIMBER CREEK BY WRANGLER ®
• Chic ®
• Gitano ®
• 20X ®
• Hero by Wrangler ®
• Maverick ®
• Old Axe ®

Imagewear:

• Red Kap ®
• Bulwark ®
• The Force ™
• Lee Sport ®
• CSA ™
• Chase Authentics ®*
• NFL Red ®*
• NFL White ®*
• Majestic Athletic ®
• Sentinel ®
• First Call ®
• Chef Designs ™

Outdoor:

• The North Face ®
• JanSport ®
• Eastpak ®
• Napapijri ®
• Kipling ®
• Vans ®
• Reef ®
• Eagle Creek ®

Sportswear:

• Nautica ®
• John Varvatos ®

Contemporary Brands:

• lucy ®
• 7 For All Mankind ®

Customers

"VF’s customers are specialty stores, department stores, national chains and mass merchants in the United States and in international markets, primarily in Europe. Sales to VF’s ten largest customers, all of which are retailers based in the United States, amounted to 30% of Total Revenues in 2006, 31% in 2005 and 35% in 2004. These larger customers included (in alphabetical order) Federated Department Stores, Inc., Kohl’s Corporation, J.C. Penney Company, Inc., Sears Holding Corporation, Target Corporation and Wal-Mart Stores, Inc. Sales to the five largest customers amounted to approximately 24% of Total Revenues in 2006, 25% in 2005 and 28% in 2004. Sales to VF’s largest customer, Wal-Mart Stores, Inc., totaled 13.2% of Total Revenues in 2006, 14.0% in 2005 and 13.5% in 2004, substantially all of which were in the Jeanswear Coalition." 10-K 2007

Suppliers

"Our domestic jeanswear and imagewear businesses operate owned manufacturing facilities (primarily cutting, sewing and finishing) principally located in Mexico and Central America. Our international jeanswear businesses operate manufacturing facilities located in Poland, Turkey and Malta. For these owned production plants, we purchase raw materials from numerous domestic and international suppliers for scheduled production. ... No single supplier represents more than 4% of our total cost of sales. Over the last several years, VF has shifted production from the United States to lower cost locations. As a result of this shift in sourcing, approximately 32% of our domestic Net Sales in 2006 were manufactured in VF-owned facilities, primarily in Mexico and Central America, and 67% were obtained from contractors, primarily in Asia. Similarly, European jeanswear sourcing has been shifting from owned plants in Western Europe to lower cost owned production outside of Western Europe and contracted production in the Middle East, Africa and Asia. To an increasing extent, we are using independent contractors who own the raw materials and ship only finished, ready-for-sale products to VF. These contractors are engaged through VF sourcing hubs in Hong Kong and Miami. These hubs are responsible for product procurement, product quality assurance and supplier management and handling functions in the Eastern and Western Hemispheres, respectively. All products in the Outdoor and Sportswear Coalitions, as well as a growing portion of product requirements for our other coalitions, are obtained through these sourcing hubs....The current sourcing strategy for products sold in the United States allows us to balance our needs with a mix of VF-owned and contracted production in the Western Hemisphere, combined with contracted production primarily from Asia. Owned production generally has a lower cost than contracted production. Overall, product obtained from the Western Hemisphere has somewhat higher cost but gives us greater flexibility, shorter lead times and lower inventory levels as compared with production obtained from the Far East and other more distant resources. This combination of VF-owned and contracted production, along with different geographic regions and cost structures, provides a balanced approach to product sourcing. " 10-K 2007

Competitors

• Gap Inc.
• Levi Strauss & Co.
• Sears Holdings Corporation

Customers	Suppliers	Creditors	Competitors
Customer 1	Supplier 1	Creditor 1	Competitor 1
Customer 2	Supplier 2	Creditor 2	Competitor 2
Customer 3	Supplier 3	Creditor 3	Competitor 3
Customer 4	Supplier 4	Creditor 4	Competitor 4

Financial Information (as of DATE)

Ticker Symbol: VFC
Main Exchanges: NYSE
Investor Website: http://phx.corporate-ir.net/phoenix.zhtml?c=61559&p=irol-irhome

List of largest shareholders

1. Ursula F. Fairbairn, M. Rust Sharp & PNC Bank (21,654,103 shares)
2. Mackey J. McDonald (147,730 shares)
3. PNC Financial Services Group, Inc. (21,720,313 shares)
4. AXA (12,632,394 shares)

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Shareholder	% Total Shares held
Shareholder 1	% Held 1
Shareholder 2	% Held 2
Shareholder 3	% Held 3
Shareholder 4	% Held 4

Largest Shareholders

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Country	Revenue	Profits	Assets	Employees
Country 1	Revenue 1	Profit 1	Assets 1	Employees 1
Country 2	Revenue 2	Profit 2	Assets 2	Employees 2
Country 3	Revenue 3	Profit 3	Assets 3	Employees 3
Country 4	Revenue 4	Profit 4	Assets 4	Employees 4

Governance

Executives

• Eric C. Wiseman, President and CEO
• Robert K. Shearer, Senior VP and CFO
• Bradley W. Batten, VP-Controller
• Candace S. Cummings, VP-Administration, General Counsel & Secretary
• Stephen F. Dull, VP-Strategy

Board members & affiliations

• Edward E. Crutchfield (former chairman and CEO of First Union Corporation, now Wachovia)
• Juan Ernesto de Bedout (group president, Kimberly-Clark Corporation)
• Ursula O. Fairbairn (president & CEO of Fairbairn Group LLC; director of Air Products and Chemicals, Inc., Centex Corporation, Circuit City Stores, Inc., and Sunoco,Inc.)
• Barbara S. Feigin (director of Circuit City Stores, Inc.)
• George Fellows (president & CEO of Callaway Golf Company; director of Jack in the Box Inc.)
• Daniel R. Hesse (president & CEO of Sprint Nextel Corporation; director of Nokia Corporation)
• Robert J. Hurst (managing director of Crestview Partners LLC)
• W. Alan McCollough (former CEO of Circuit City Stores, Inc.)
• Mackey J. McDonald, chairman (former CEO of VF Corporation; director of Wachovia Corporation)
• Clarence Otis, Jr. (chairman & CEO of Darden Restaurants, Inc.; director of Verizon Communications, Inc.)
• M. Rust Sharp (counsel Heckscher, Teillon, Terrill & Sager)
• Raymond G. Viault (former vice chairman of General Mills, Inc.; director of Safeway Inc., Newell Rubbermaid Inc., and Cadbury Schweppes)
• Eric C. Wiseman (president & CEO of VF Corporation)

Executive/director compensation

• Eric C. Wiseman, President and CEO: USD 1.49 million & USD 2.89 million exercised
• Robert K. Shearer, Senior VP and CFO: USD 1.03 million & USD 3.66 million exercised
• Candace S. Cummings, VP-Administration, General Counsel & Secretary: USD 770,000 & USD 1.03 million exercised

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Contact Information

105 Corporate Center Boulevard
Greensboro, NC 27408
U.S.A.
Tel: 1-336-424-6000
http://www.vfc.com

Articles and Resources

Books on the Company

Rodengen, Jeffrey L. 1998. The Legend of VF Corporation. Fort Lauderdale: Write Stuff Enterprises.