Lawrence R. Pugh
October 1 1992 by Peter Lacey
In a $6 billion “jeanswear” market bursting at the seams with manufacturers, VF Corp.’s Wrangler, Lee, Rustler, and Girbaud brands sewed up a 27 percent market share in 1991. These powerhouse brands alone chalked up more than 55 percent of $2.95 billion in overall sales for Wyomissing, PA-based VF, the undisputed market leader.
Says Lawrence R. Pugh, VF’s chairman, president, and CEO: “We are covering every retail segment and every consumer segment, and we are No. 1 in each category because of our multiple brand strategy.”
Keeping VF ahead of such archrivals as Levi Strauss (21 percent of the domestic jeanswear market but the leader overseas) is a demanding job, and recently, there have been some rough spots. Net income dropped 54 percent over the two years ended in 1990. Pugh describes the period as “two tough years.”
But last year, profits doubled to $161 million, and return on equity was a solid 18.8 percent. In the second quarter ended July 4, net income jumped 51 percent to $46.2 million. Observers attribute the company’s rebound to a tighter focus by Pugh and his managers and a program to help retailers sell more aggressively.
In Pugh’s 12 years as CEO, VF’s sales have climbed to almost $3 billion from $600 million, the result of aggressive brand management. In addition to jeanswear-a category that includes just about any clothing made of denim-VF also makes sportswear and intimate apparel with such well-known brand names as Jantzen, Vanity Fair, and Vassarette.
Many companies have succumbed to the lure of producing in lower-cost locations, such as the
Home-market manufacturing speeds the distribution of VF goods: The company is striving to cut cycle time by 40 percent, inventory by 80 percent, and costs by 20 percent. The targets are part of VF’s Market Response System, a complex blend of merchandising, market analysis, satellite data transmission, and just-in-time manufacturing.
“We used to ship stuff that we thought was right, the store thought was right, but the consumer wasn’t buying,” Pugh says. “We’d have tons of markdowns and arguments with retailers about who would pay for this. Thirty percent of the time, the consumer does not find the style or color or size he or she wants. We’re cutting that down to 10 percent.
“The industry used to deliver two major product lines a year,” adds Pugh, who became VF’s CEO in 1980 after working 22 years in the consumer products business for such companies as Borden,