18 Sep Timberland Lays Out Five-Year Growth Plan
Timberland laid out its plans to grow revenues by $1.4 billion during the next five years at an investor meeting at its headquarters in Stratham, N.H..
Timberland’s management discussed their expectations for total revenues to reach $3.1 billion by the end of 2019, representing growth of 13 percent per year. The Timberland brand is a wholly owned subsidiary of VF Corporation (VFC).
“2014 will mark the most successful year in Timberland’s history – another clear example of VF’s powerful business model that enables brands to connect deeply with consumers, and drive growth and profitability, while preserving a unique DNA and culture,” said Eric Wiseman, VF Corporation President, Chairman and CEO. “Since our acquisition in 2011, our work with the Timberland team has created an incredibly strong foundation for its next chapter of growth. We are proud of the progress Timberland’s made, and we’re bullish on the opportunity for this amazing brand.”
Geographic Growth
Over the next five years, Timberland expects substantial growth in each major geographic region: Americas, EMEA and Asia Pacific. This growth will be driven by industry leading innovation and product diversification; consistent channel discipline; meaningful expansion of its direct-to-consumer business; and a significant amplification of how Timberland communicates and connects the brand with consumers.
Growth in the Americas region will account for nearly half of the anticipated $1.4 billion in total revenue growth, representing an annual growth rate of 14 percent for the region. This U.S. led growth is expected to be balanced across both wholesale and direct-to-consumer channels.
In EMEA (Europe/Middle East/Africa), Timberland expects to add $380 million to reach $1 billion in revenues by 2019. With an expected annual revenue growth rate of 10 percent, this region will capitalize on its big businesses in Italy and the United Kingdom to expand further into Germany, Austria and Switzerland.
The Asia Pacific (APAC) region is expected to double its business, growing revenues by 15 percent annually to reach $620 million by 2019. Most of the $310 million of projected revenue growth is expected to come from China and South Korea, which are largely untapped markets for the brand.
Channel Growth
Timberland’s growth over the next five years is expected to be balanced across both wholesale and direct-to-consumer channels. Wholesale revenues are expected to grow by $825 million over the period to reach $2 billion, driven by a 13 percent annual growth rate in the Americas region, 8 percent growth in EMEA and 14 percent growth in the APAC region.
Direct-to-consumer revenues for Timberland are expected to reach $1.1 billion, representing an additional $570 million in sales, and an annual growth rate of 15 percent over the five-year period. E-commerce is expected to be Timberland’s highest percentage growth channel, increasing by 31 percent annually and adding $180 million in revenues over the next five years. To showcase the brand’s unique and authentic collection of outdoor lifestyle products and culture, Timberland plans to expand its global retail store presence by adding 130 stores to its current base of approximately 230 stores.
“Being able to tap into VF’s powerful platforms has allowed us to realize significant synergies, giving us the tools and resources to invigorate the Timberland brand,” said Patrik Frisk, VF Coalition President, Outdoor Americas and Timberland President. “Across products, channels and geographies – our consumer insights-driven strategy has Timberland squarely positioned to become the largest, most sustainable outdoor lifestyle brand on Earth.”