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Translated by
Nicola Mira
Aug 2, 2019
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4 minutes
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The North Face relying on Futurelight technology to boost results in current financial year

Translated by
Nicola Mira
Aug 2, 2019

In early July, at the OutDoor by ISPO trade show in Munich, The North Face put its new Futurelight breathable waterproof fabric technology centre stage, with special effects and product tests galore. The outdoor apparel brand owned by VF Corp. made it clear that it will rely heavily on this proprietary technology for seasons to come.

Jan Van Leeuwen, Europe General Manager of The North Face - FNW

“We launched [Futurelight] at the ISPO show in January, and the feed-back from our partners has been great. We made it available to retailers for testing, and they greatly appreciated its breathability, its waterproof capability and of course its sustainability. We will launch it to consumers on October 1 with our top partners, focusing chiefly on specialist retailers and on our own stores. It will be our main marketing initiative for the autumn,” said Jan Van Leeuwen, Europe General Manager of The North Face.

In practical terms, the launch of Futurelight is expected to enable sales for The North Face to keep growing at a steady pace, notably with specialist retailers. In Q1 of the current financial year, sales for The North Face increased by 9% over the same period a year earlier, and by 12% in like-for-like terms.

In the Americas region, which accounts for approximately two thirds of the brand’s revenue, The North Face grew by 10%. The EMEA region, worth just over 20% of global sales, grew by 4%, with comparable sales up 11%. In Asia-Pacific, currently the brand’s smallest region sales-wise, revenue rose by a healthy 14%, with comparable sales up 20%.

Regional performance map for The North Face - VF Copr

Several elements stood out in the brand’s first quarter performance. First of all, there were differences between the various regions. In the Americas, sales in the wholesale channel leapt by 18% owing to a positive placement of mid-season products, while direct retail sales grew only by 1%. In Asia-Pacific, the retail and wholesale channels are growing at the same pace, with a 17% rise in China. Instead, in Europe, comparable wholesale revenue was up 4%, while direct retail sales posted a 24% increase in like-for-like terms. VF Corp. underlined that The North Face grew in double figures in Germany, Italy, Spain and France, a result that was clearly aided by direct online sales, which were up 60% in the EMEA region in Q1.

The North Face has a firm foothold in major cities with its monobrand stores, tapping the appetite of young urban consumers for the brand. For example, in Asia-Pacific, the Urban Exploration line nearly doubled its sales. In EMEA, led by the Mountain Lifestyle range, the brand posted double-digit growth.

The North Face is keen to make big gains with specialist retailers, within a flat European market for outdoor apparel and footwear, a market worth €4.6 billion according to 2018 figures published by the European Outdoor Group (EOG), and the launch of Futurelight seems to be tailor-made for this purpose.

Sales trend in 2017-2018 for outdoor apparel, footwear and backpacks; in 2018, EOG figures estimated the European outdoor apparel and equipment market at €5.81 billion - EOG

According to the conversation between VF Corp.’s CEO Steve Rendle and financial analysts at the presentation of the group’s first quarter results, The North Face has earmarked some $20 million in marketing investment for the launch of Futurelight.

“It’s worth remembering that the positioning we chose, in relation to the product range for this autumn, is at the top of our outdoor and mountain segments, in the Summit Series and Steep Series lines,” said Rendle.

“It isn’t an extensive deployment, focused mainly on our most technical items. This is the ideal market positioning to start with. Then, over time, we will introduce [Futurelight] in a gradually larger slice of our product range."

The North Face is keen to appeal to an increasingly broad clientèle. The new strategy will be operational also in spring 2020. “We are going to use Futurelight technology for footwear,” said Van Leeuwen. “It was developed to be used with apparel products, and we have had to learn to work in a different way to apply it to footwear. But now we have a much more extensive range. In spring, we will launch waterproof jackets, running tops and more,” he added. Futurelight technology will also be used for the high-end Blackyard Series line.

Until now, The North Face has let specialist outdoor apparel and equipment media do the talking on the new technology, but from October 1 it will support the launch with its own campaigns. The investment will focus on print and digital media, and on in-store merchandising. China will enjoy special attention, according to VF Corp.’s chief financial officer Scott Roe, who said that “we see an opportunity there, and we will need to make a little more of a storytelling effort on the Chinese market.”

VF Corp. is forecasting a growth for The North Face in the current financial year between 8% and 9%. With all of its labels, the US group generated a global revenue of $2.3 billion in Q1, up 6% compared to the same period the previous year.

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