During the 1980s I had the pleasure of working in VF Corporation’s headquarters alongside its futureleaders. And, while the business grew from $634 million in 1980 to $2.6 billion at the end of the decade, and from a portfolio of three brands to 12 brands entering the decade of the 90s, the three most powerful competitive assets coming out of that period were:
- Their obsessive focus on consumers and the development of the processes for identifying them (for each and every one of their now over-30 brands); for understanding them and their desires, down to a “gnats eyelash;” and for responding to those desires when, where, how, and how often their customers desire them. And, this process is continuous.
- The decentralized, “portfolio” organization of its model: providing each brand the autonomy necessary to run its own “front end” of the business; maintaining the brand’s DNA connection with its consumers; managing all of its innovation, product development and marketing. Those functions that can create a synergy, providing leverage for each of the individual brands, such as finance, research, sourcing, and all of the “back-end” supply chain activities, are centralized and operated corporately.
- The development of the processes for linking every activity in the value chain to each and every consumer (the linking of #1 and #2 above). Essentially, VF has a never-ending value chain, fully integrated, virtuous cycle, starting with the consumer (their DNA’s, what, when, where, how and how often their desires), pausing at point of consumption, the information from which triggers the cycle to start all over again.
These are the assets that, in my opinion, both propelled its growth and provided CEO Mackey McDonald (during the 90s), and current CEO, Eric Wiseman, with the platform to fundamentally transform the VF Corporation from a single-product branded wholesale business (e.g. jeans and intimate apparel), manufacturing domestically in its own plants, to a lifestyle brand management business that markets its brands through select retail distribution, including its own stores and online sites, around the world, and outsources its manufacturing globally as well.
These are the underpinnings, the foundation of the biggest, and in my opinion, the best apparel company in the world. It is also why they will continue to raise their own bar. See my article and Q&A for how they intend to do so.
Also in this issue, a revealing look at Eddie Lampert’s dubious strategy to transform Sears and Kmart for 21st Century survival; why Target and Amazon are locked in a real vs. virtual Hungry Games challenge; how the back-to-school selling season has accelerated starting in August; and why going beyond discounts and deals delivers a better promotional strategy. And there’s more! Find out why we’re headed for a privacy revolution which could change the Internet playing field.
All in all, the Robin Report continues to bring you insights from the inside out, with provocative, revealing and opinionated reports from the best in the business.
Have a great read.