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V.F. Corp's (VFC) New Transformation Plan to Fuel Asia Growth

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V.F. Corporation (VFC - Free Report) remains focused on strengthening its business globally, as part of which it is making solid efforts to bolster operations in the Asia Pacific. Moving on such lines, this designer, marketer and distributor of branded lifestyle apparel, footwear and associated items has unveiled a transformation plan for its Asia-Pacific operations.

The plan aims at evolving the organizational design and footprint in the region, alongside developing new capacitates to speed up brand growth. Notably, V.F. Corp will relocate the hub of its brand operations from Hong Kong to Shanghai as part of this transformation plan. The company presently has roughly 900 office and retail workers in Shanghai. This move is likely to help V.F. Corp build stronger ties with consumers in China.

Further, the transformation initiative involves the company moving its Asia Product Supply Hub from Hong Kong to Singapore. This is likely to facilitate improved integration in the company’s worldwide supply chain, which includes key centers in the Americas and Europe. Apart from this, the company will establish an additional shared services center for the Asia Pacific region, in Kuala Lumpur, Malaysia. This, in turn, will help V.F. Corp further extend the footing of its back-end operational functions, which support its brands as well as supply chain in the Asia Pacific. Nonetheless, management stated that Hong Kong will continue to serve as a key retail market for the company and its brands.

Markedly, V.F. Corp will initiate a phased transition to undertake the abovementioned relocations in the next 12-18 months. The first relocation is anticipated in April 2021.

Transformation Strategy Likely to Fuel Growth

We note that the company had set its presence in Asia about 25 years back and has been committed to enhancing its business around the region ever since. Certainly, the abovementioned transformation initiative underscores V.F. Corp’s focus on making investments in the Asia Pacific, alongside backing its overall transformation plan, which includes being a more hyper-digital, retail-oriented and consumer-focused business.
The company has taken bold steps in recent years to elevate its brand in Asia, with new digital capacities and better relations with the digital giants, among other actions. We believe that the latest transformation initiative will help V.F. Corp build on its robust base and tap greater opportunities in the future.

Impressively, this Zacks Rank #2 (Buy) stock has surged 45% in the past six months compared with the industry’s growth of 44.2%.

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Ralph Lauren (RL - Free Report) has a Zacks Rank #1 (Strong Buy) and a long-term earnings per share growth rate of 8.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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