Timberland Struggles to Sell Its Classic Boot
By Charity L. Scott
Timberland lost its footing in the holiday season.
Sales of the iconic boot brand in the December quarter fell 4%
from a year earlier, according to owner VF Corp. And executives
warned that sales were expected to fall for the fiscal year that
ends in March, instead of increase as they had previously
The disappointing results and outlook weighed on VF shares, and
they tumbled nearly 10% Thursday.
Steve Rendle, VF's chief executive, said on a call with
investors that he expects annual Timberland sales to fall 1% to 2%,
and that getting the brand back on track will likely take more
"We're going to struggle to grow next year" since many
wholesalers will base their future orders on how the brand sold
this holiday season, he said. "We have to have a sober assessment
of where we're at."
VF, an apparel giant that also owns the Vans and North Face
brands, bought Timberland for $2 billion in 2011. At the time, the
New Hampshire-based boot maker had $1.43 billion in annual sales
but was struggling with rising leather and labor costs.
Following the acquisition, unit sales rose for the classic
yellow boot, which was popular workwear that doubled as streetwear.
But sales have mostly declined in recent years. In fiscal year
ended March 2019, Timberland had $1.9 billion in revenue, or 15% of
VF executives told investors last fall they were seeking to
boost sales by diversifying beyond the yellow boot, adding more
women's footwear and designs for men, as well as expanding the
brands sales in China.
Paul Lejuez, a retail analyst at Citi, said it won't be clear
until later in the earnings season whether Timberland is losing
market share, or perhaps another factor, such as an
uncharacteristically mild winter, is responsible for slipping
sales. Regardless, Timberland wasn't a highflying brand before the
most recent quarter, and improvements to its core men's business
are needed, he said.
"Sales tell the story of popularity" Mr. Lejuez said.
Mr. Rendle said the brand is working to diversify its offerings
for men by focusing on fresh designs that move beyond the brand's
classic workwear-oriented styles. "We have to elevate the product,"
VF has been an aggressive buyer and seller of brands. Last year,
it spun off its jeans business, including Wrangler, into a company
called Kontoor Brands Inc. Earlier this week, VF said it was
exploring the sale of most of its workwear business, but excluded
Timberland and Dickies from the list.
On Thursday, Mr. Rendle said the company was "deeply committed"
to Timberland and intended to turn around its performance. But, he
said, "we don't have endless patience."
Some investors' patience has already worn thin. VF shares
finished the day off 9.7% at $85.41. The stock traded above $100 at
the start of the month.
On Thursday, VF lowered its fiscal 2020 profit outlook. It also
reported that for its fiscal third quarter, ended Dec. 31, net
income from continuing operations rose 11% to $452.7 million and
revenue increased 5% to $3.38 billion.
(END) Dow Jones Newswires
January 23, 2020 18:57 ET (23:57 GMT)
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