AGENDA: Video recaps, 2015 show dates, "Love Made Me Do It" women's networking series on Wednesday.
STOKES ME: Deadline today to enter SIMA Humanitarian Fund's Bowl-a-thon fundraiser.
Details on Industry Insight.
I got a great update on Vans business when I met with President Steve Murray at ASR.
The tough economy doesn't seem to be slowing down Vans much. Parent company VF Corp. consistently cites Vans and The North Face as the strongest performers in its portfolio of brands.
Retail comps at Vans stores remained strong in the first half, and its wholesale business in different channels is motoring along. Going forward, the company sees big opportunities in expanding its apparel offering beyond the core channel.
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Here are some details. Steve and I talked about numbers for the first half of the year. Because VF is publicly traded, Steve can't discuss current third quarter figures that haven't been released.
Retail: In the first quarter, comps at Vans stores rose just above 10 percent. In the second quarter, comps rose just above 5 percent.
I remember years ago when Vans was a publicly-traded company, the Vans stores under a previous regime were somewhat of a disaster and a big drag on results.
I asked Steve how Vans has turned the retail division around.
He said the difference is focus. Executives made retail an integral part of its turnaround plan several years ago and began treating the division as well as it treats its most favored wholesale customers.
Vans also brought in a new team to lead retail, and focused on product merchandising and how the stores looked visually.
The company has opened eight to nine stores so far this year, with a couple more scheduled to open by year end. Currently, Vans operates approximately 175 stores.
Store growth in 2008, 2009 and probably 2010 will come mostly outside of California, in states such as New Mexico, Texas, Arizona, Nevada, Colorado, the Pacific Northwest and along the Eastern Seaboard.
Wholesale: Vans is bucking the economic trend in some channels, especially at core stores, even though many of those stores are struggling in the downturn. Business is also good in California, where others have reported tough sales in the region.
Here's an update on Vans performance in the first half of 2008 in its wholesale segments. Vans operates at nearly every distribution level and creates products specially for the different tiers.
Sporting goods - up mid-teens
Family footwear - up high-single digits. Especially strong on the West Coast, with retailers like Shoe City and Eurostar the top performers. Steve said those retailers understand and support the skate category more comprehensively than in other parts of the country. Business was tougher in the Southeast and Florida.
Midtier - fairly flat
Lifestyle stores at the mall - choppy, with a slight decline at the half year, though sales are improving as other lifestyle retailers seem to be picking up new customers from PacSun's decision to reduce their footwear assortment.
Apparel: When VF bought Vans, the apparel business was very small. The goal was to take Vans to $500 million in sales overall, with apparel growing to 20 percent of sales, or $100 million.
Because Vans has grown past that $500 million mark, Steve said apparel has "blown past that dollar figure" target long ago, but does not yet comprise 20 percent of sales, Steve said. (VF does not break out current Vans revenue figures.)
Initially, Vans had some delivery challenges and supply chain issues in its apparel offering after being acquired by VF. That has stabilized now, he said.
Currently, apparel is mainly targeted at the core market. Strong categories include T-shirts, shorts, the Vans signature collections and accessories. Fleece has not been a top performer.
Currently, plaid shirts for men and women are hot.
Vans apparel in Europe is "on fire," Steve said.
Going forward, Steve said the next logical step is to move apparel into the lifestyle stores at the mall.
The company sees "a lot of white space" in the apparel area, including broadening the assortment, including the surf market in the offering and creating product for the more mainstream consumer.
Vulcanized shoes: I've heard reports that the vulcanized shoe trend was slowing down and asked Steve about that. He said Vans has not seen that. He said the market was saturated by vulcanized slipons last summer, thanks to knock offs. But the forward-thinking retailers saw the saturation coming and moved off the style early and moved on to lace ups. Luckily, Vans Classics has eight or nine styles in the line so there's a lot to choose from.
Cupsole shoes: Though vulcanized shoes are Vans "bread and butter," the company is working hard to improve its cupsole (a more traditional skate shoe) offering.
Girls apparel: Vans also sees a lot of opportunity in girls apparel and is doing a soft launch of a swim line for spring.